Code of Conduct for Monetary Policy Board Members April 2025
Preamble
The Monetary Policy Board determines the monetary policy of the Reserve Bank of Australia (Bank) and the policy of the Bank (other than its payments system policy) for contributing to the stability of Australia’s financial system. The functions and powers of the Monetary Policy Board are set out in section 9B of the Reserve Bank Act 1959.
Members recognise their role in maintaining the Bank’s reputation for integrity and propriety in all respects and so they agree to adhere to this Code of Conduct.
General Principles
Members will observe the highest possible standards of ethical conduct. They will seek to enhance the Bank’s standing in the community and reputation for integrity, fairness, honesty and independence.
Provisions
Members of the Monetary Policy Board must comply with their statutory obligations in that capacity. The main sources of those obligations are the Public Governance, Performance and Accountability Act 2013 (PGPA Act) and the Reserve Bank Act.
Members’ obligations under the PGPA Act include, but are not limited to, obligations to exercise their powers and discharge their duties with care and diligence, honestly, in good faith and for a proper purpose.
Under the Reserve Bank Act and the secrecy declaration given by members under that Act, members are obliged at all times to maintain confidentiality in relation to the affairs of the Bank’s boards and the affairs of the Bank. Members must not divulge any information they learn as a member of the Monetary Policy Board (including any information relating to the affairs of another board of the Bank), except by authority of the Monetary Policy Board or under compulsion or obligation of law. This obligation continues after the term of the member ends.
Members, who in the ordinary course of their activities outside the Bank have occasion to discuss economic matters, do so on the basis that the views they present are personal or affiliated with another institution, not the Bank.
When members conduct any public engagement in their capacity as members of the Monetary Policy Board, they will do so in accordance with a communications policy agreed by the Board.
Under section 7D of the Reserve Bank Act, members must furnish a confidential statement of material personal interests to the Treasurer annually and, during the year, notify any substantial change since their most recent annual statement. This disclosure enables members to discuss and decide monetary and financial system stability policies notwithstanding a material personal interest in the outcome.
Members must disclose to the other members of the Monetary Policy Board:
- in accordance with section 7E of the Reserve Bank Act, any material personal interest they have that relates to a matter being considered at a meeting of the Monetary Policy Board other than monetary and financial stability policies; and
- in accordance with section 29 of the PGPA Act and any applicable Rule made under that Act, any material personal interest they have that otherwise relates to the affairs of the Bank.
The disclosure must include details of the nature and extent of the interest and how the interest relates to the matter being considered at the Monetary Policy Board or the affairs of the Bank (as applicable). Members may give standing notice to other members outlining the nature and extent of a material personal interest. Disclosure of a material personal interest by a member may result in the member being excluded from deliberations, or taking part in any decision, with respect to the relevant matter.
Members considering taking on a material personal interest that might present, or might be perceived as presenting, a risk of conflict with their role as a Monetary Policy Board member, should consult the Chair of the Monetary Policy Board before committing themselves in order for the matter to be managed appropriately.
Members must take great care when dealing with offers of entertainment, travel, accommodation or any other benefit from third parties. Members must avoid actual conflicts that might arise from such offers that could damage the Bank’s reputation for integrity and independence. They should also take reasonable steps to avoid any perceived conflicts that might arise in these circumstances.
Under the Reserve Bank Act, a member is not permitted to be a director, officer or employee of an Authorised Deposit-taking Institution (ADI). In addition to this legislative requirement, this Code of Conduct requires members:
- to advise the Governor of the existence of any material personal interest in an ADI or other financial entity (this is in addition to the disclosure to the Treasurer)
- not to perform any paid or unpaid work as a consultant or adviser to an ADI
- not to perform any paid or unpaid work as a director, officer or employee of, or a consultant or adviser to, a holder of an Australian credit licence or any private-sector entity operating in Australia whose main business is the provision of finance
- not to participate in deliberations of an entity that provides or manages insurance, a registrable superannuation entity or a managed fund more generally, where there may be an actual or perceived conflict of interest with their role and obligations as a member of the Monetary Policy Board. This does not preclude members’ involvement in the governance of the entity’s investment strategy, consistent with any duties they might have as a director, but does preclude members from participating in active management of funds for such an entity.
Members’ obligations under the PGPA Act also require that they must not improperly use information obtained as a member of the Monetary Policy Board to gain an advantage for themselves or any other person or to cause detriment to the Bank or any other person. Other persons include corporations and therefore include companies of which a member is a director, adviser or employee.
Members must take great care to protect the Bank’s reputation when undertaking financial transactions for their own account or when participating in decisions regarding financial transactions in relation to their business or other interests, or those of entities they control or persons whose affairs they control or influence (collectively referred to as ‘associated entities’). Members and associated entities are prohibited from undertaking transactions in foreign exchange derivatives and interest rate derivatives, and from engaging in or being involved in ‘active trading’ in ‘financial instruments’.
‘Active trading’ is regarded as trading that is frequent and speculative. ‘Financial instruments’ include interest rate products (for example, bonds, bills, notes, certificates of deposit and term deposits), shares, warrants, options, corporate bonds and foreign exchange (other than for travel purposes).
Members and associated entities must not transact in financial instruments in the ‘blackout period’, namely the period between the time at which Monetary Policy Board papers are made available to members (usually at 10.00 am Sydney time on the Friday prior to a board meeting) and 5.00pm Sydney time on the day that the Monetary Policy Board’s monetary policy decision is announced. This restriction does not preclude passive, predetermined investments (for example, the rollover of a pre-existing term deposit, a regular pre-arranged contribution to a managed investment scheme or shares purchased under a dividend reinvestment plan).
The Governor and Deputy Governor adhere to this Code as well as to the Code of Conduct for Bank staff. The Secretary to the Treasury adheres to this Code as well as to the Australian Public Service Code of Conduct.
Where issues arise that are not specifically addressed in this Code, members should exercise sound judgement and behaviour consistent with the provisions of this Code and, if they are unsure about a particular issue or circumstance, they should consult the Chair of the Monetary Policy Board.