Friday, 23 October 2009

The Reserve Bank’s pay policy

With all the current concentration on ensuring that the pay policy of banks does not encourage risk taking behaviour by executives, it would be interesting to know how Australia’s Reserve Bank rewarded people in charge of its note printing operations.
Over recent months the Melbourne Age has been probing away at the methods used to obtain contracts for those uniquely Australian plastic notes with today’s instalment revealing that Nigeria’s National Assembly is to investigate the country’s former central bank governor over allegations he was bribed to award a contract to a company controlled by our Reserve Bank.
It is not a good look when your guardians 0f monetary integrity are under this kind of suspicion. Surely the Bank would not have encouraged some less than honourable conduct by paying bonuses based on short term profitability.
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