House of Representatives Committees

Standing Committee on Economics, Finance and Public Administration

Review of the Reserve Bank of Australia annual report 1996-97

Media release, 31 October 1997

RESERVE BANK GOVERNOR TO FACE PARLIAMENTARY COMMITTEE

Reserve Bank Governor, Ian Macfarlane, will appear before the House of Representatives Committee on Financial Institutions and Public Administration next week to report on the conduct of monetary policy.

According to Committee Chairman, Mr David Hawker MP, the Bank's appearance is timely given the recent turmoil on world financial markets.

"The instability on world financial markets, particularly in Asia, is causing considerable concern and the Committee will be seeking the Governor's views on the impact this will have on the Australian economy," said Mr Hawker.

"The difficulties being experienced in many ASEAN economies is important, but the potentially more significant impact may come from the flow on from these economies to Australia's significant Asian trading partners in Japan, China and South Korea which account for 60% of our exports," Mr Hawker added.

"There have been varying reports on the likely impact on economic growth in Australia, and while it may be premature to make such an assessment at this time, the Committee will question the Governor on the likely impact on growth, employment and interest rates."

"This is of vital concern to the community, Australia has taken some very hard decisions to ensure that solid groundwork has been laid for improvements in growth and job creation." said Mr Hawker.

"A further matter that I anticipate being canvassed is the impact that the parlous state of the banking systems in Japan and South Korea may have on this situation."

"It is interesting to note that it appears that a significant factor influencing the problems in the banking sectors across Asia relates to the adequacy of supervision, this is a timely reminder of the importance of the supervisory role of the Reserve Bank."

In addition to issues related to monetary policy, the Committee will also canvass a number of matters related to supervision of the financial system including interest rate margins, management of credit risk, asset price inflation and the payments system.

Finally the Committee will examine a number of matters related to the proposed reforms to the financial system arising from the Wallis report.

Ends
31 October 1997
Further information: David Hawker MP (Chairman) (02) 6277 4100
Chris Paterson (Secretary, FIPA Committee) 02 6277 4587

Program

Reserve Bank of Australia Public Hearing
Date: Thursday 6 November 1997
Time: 10.30am to 2.00pm
Location:
Level 8
Rooms 814/815
NSW State Parliament
Parliament House
Macquarie Street
SYDNEY

Witnesses:
Mr I J (Ian) Macfarlane, Governor
Dr S A (Stephen) Grenville, Deputy Governor
Mr G J (Graeme) Thompson, Deputy Governor

Note:
Media access to the public hearing room will be available following the opening of Parliament House at 8.30am.
Media representatives will be required to bring their State Parliamentary Press Passes and interviews and filming is restricted to the hearing room ie Rooms 814/815.

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