Andrew Hauser, the new deputy governor of the Reserve Bank, brings three decades of experience at the Bank of England to the role, including work on how central banks can help avoid the “disastrous consequences of global warming”.
The treasurer, Jim Chalmers, on Monday appointed Hauser to fill the RBA’s deputy governor role that was made vacant by Michele Bullock when she became governor in mid-September.
Hauser is currently the executive director in charge of markets at the Bank of England, and will take up the new position ideally before the RBA holds its first interest rates meeting on 6 February next year, Chalmers said. The new appointee holds an undergraduate degree at Oxford and a masters of economics at the London School of Economics, an institution attended by Bullock.
In a paper delivered in May 2021 entitled It’s not easy being green – but that shouldn’t stop us, Hauser said “[a]chieving net zero is a pressing global priority. It requires action from everyone, including central banks”.
Hauser said markets were “mispricing” climate risk and the Bank of England could use its bond-buying scheme “to support net zero in ways that don’t compromise its monetary policy goals”.
Veteran RBA watchers said it was rare for outsiders to be appointed to senior positions, with Hauser’s appointment likely prompted by a review into the bank earlier this year. One of its 51 recommendations was to “further encourage diverse viewpoints and constructive challenge”.
“There is a risk of groupthink within the RBA, which can be driven by concentrated policy and operational decision-making processes,” the review said.
Chalmers’ choice means the RBA board will return to its full nine members just as the bank shifts from monthly meetings to holding them every six weeks.
The last outsider to be given a senior role was Bernie Fraser, who was appointed to governor in 1989. At the time, though, Fraser was treasury secretary and automatically a member of the RBA board.
John Hawkins, a senior lecturer at the University of Canberra and formerly at both Treasury and the RBA, said it wasn’t clear Hauser had particular links or knowledge about Australia.
“It’s not obvious that he’s a stronger candidate than Christopher Kent,” Hawkins said, referring to the current RBA assistant governor for economists. The Bank of England’s own performance in recent years was arguably less successful than the RBA’s, with inflation spiking higher in the United Kingdom than in Australia.
Selwyn Cornish, author of a history of the RBA and now with the Australian National University, said Hauser’s appointment was “unique” given the tradition of internal promotions. Still, Hauser “seems to be very well-qualified” given his exposure to “taxing times” at the Bank of England, including a deep recession during the global financial crisis.
