Australia's Money Mandarins: The Reserve Bank and the Politics of Money.

• Jurisdiction: Australia
• Date: 01 January 2005
• Author: Lansley, David
• Published date: 01 January 2005
• Author: Lansley, David

Australia's Money Mandarins: The Reserve Bank and the Politics of Money Stephen Bell Cambridge, Cambridge University Press, 2004 $59.95

In September 1999, The Economist began a survey of the world economy on a cautionary note: 'Central banks are now more powerful than ever before. They should enjoy their moment of glory: it will not last". In his book Australia's Money Mandarins: The Reserve Bank and the Politics of Money, Stephen Bell looks at how Australia's central bank, the Reserve Bank of Australia (RBA) achieved its (decade plus) moment of glory, the costs to the wider community of the RBA attaining its present position of unprecedented influence, and the risks it faces as new challenges to the current monetary policy orthodoxy arise. In doing this, Bell supplements secondary and primary sources with interviews with major players in the RBA's recent history including Governors Bob Johnston, Bernie Fraser and Ian Macfarlane, and former Treasurer and Prime Minister Paul Keating.

The book is essentially in three parts. The first four chapters (which account for about half the book) trace the history of the RBA and its predecessor the Commonwealth Bank of Australia (CBA) from its creation in 1912 to the present. The narrative begins with a concise overview of the main institutional developments in Australian central banking up to the deregulation of the financial system following the Campbell Committee's final report in 1981. The pace picks up with examination of the protracted battle with, and eventual victory over, inflation. While winning the war, the RBA lost direction during the difficult policy environment of the 1980s, a decade book-ended by recessions due at least in part to heavy handed monetary policy. The first section concludes with a discussion of monetary policy in the less turbulent 1990s, a decade that saw the success of monetary policy rise in tandem with the power and independence of...