Media Release Statement by the Governor, Mr Ian Macfarlane:
RBA Board Proceedings

The question of conflicts of interest for private sector members of the Reserve Bank Board has been raised in the media and elsewhere in recent days, particularly in connection with the Bank's sales of gold in the first half of 1997.

lt is inevitable that potential conflicts will arise from time to time for members of a Board which has responsibility to make decisions affecting the economy as a whole, as well as particular sectors of the economy. This is a consequence of the longstanding arrangements in Australia which seek to bring a range of commercial and other private sector expertise and knowledge to bear on the central bank's policy-making.

lt would make the Board of the Bank unworkable if members had to absent themselves from all discussions and decisions which potentially gave rise to conflicts of interest with their other activities.

In making its appointments to the Board, the Government selects people who are judged to have high ethical standards, and able to dissociate their personal and business interests from the national interests with which the Bank is concerned. Furthermore, on appointment, each member signs a Declaration of Secrecy to prevent them from using information gained in their position on the Bank's Board in carrying out their responsibilities outside the Bank.

On the basis of my discussions with Mr Morgan, and the statement he issued today, I am satisfied that Mr Morgan has fulfilled his obligations as a Board member.