"They key messages from Glenn Stevens yesterday are that the RBA has switched to “managing the expansion”, that the world’s centre of gravity continues to shift towards Asia, which is good for us, the peak impact of fiscal stimulus has passed as has the peak of the credit contraction, Greece is no big deal although sovereign debt generally is, unemployment may not fall much further, and the RBA doesn’t leak to journalists – not ever.
On that last point: yeah, right, and Tiger Woods is gay. The RBA doesn’t leak to me, that’s for sure, but there are few economic journos who have an uncanny knack of picking what the RBA is going to do next. It can’t just be that they’re better than me. I certainly don’t believe that."
And then this today from Dr Stephen Kirchner at the CIS:
"Stevens is probably correct to argue that the outcome of the Board meeting has never been leaked outright, but that was not what the Lateline Business story was about. The issue raised was whether the RBA backgrounded journalists to the point where they were much better informed about the RBA’s policy bias and therefore better able to call the likely outcome of the Board meeting.
There is evidence on the public record for the view that the RBA has engaged in this practice. In a profile of former Governor Ian Macfarlane published in the AFR Magazine in 2001, a former RBA official is quoted as follows:
'The Bank uses newspapers to manage expectations. It’s a game the Bank manages very well. Senior people talk to a small handful of the economics writers from the major papers on a strictly non-attributable basis. I think it’s right to do this from the bank’s point of view, but not necessarily from a public policy view: accountability and a critical press are very important in this system.'
That last sentence is the key issue in a nutshell. My sense is that the RBA has now been subjected to sufficient heat over the issue that we won’t see another episode of this in future. The test for the RBA will be whether there is a future recurrence of market speculation about RBA media backgrounding, despite the Governor’s denial."
