Australia Names RBA’s First Female No. 2, Likely Lowe Successor

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(Bloomberg) — Australia named Michele Bullock as the Reserve Bank’s first female deputy governor, propelling her to the front of the queue to succeed Philip Lowe in the top job.

Bullock was appointed to a five-year term as the central bank’s No. 2 official and will take up her role immediately, according to statements from the treasurer and the RBA Friday. The announcement is a further step in efforts to redress generations of male dominance at the upper echelons of the institution.

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“Bullock will become the first female deputy governor of the RBA in their 62-year history,” Treasurer Josh Frydenberg said in announcing her appointment. Bullock replaces Guy Debelle who resigned last month for a job in the private sector.

Bullock is the most experienced of the RBA’s five assistant governors and was widely seen as a front-runner for the role. She was assistant governor for currency and business services between 2010 and 2016, before taking on her most recent position overseeing the financial system.

She is working with a group of other central banks and the Bank for International Settlements to help develop prototypes for a common digital currencies platform.

“Michele Bullock is a strong appointment,” said John Hawkins, who previously worked at the RBA, Australian Treasury and the BIS. “With increasing discussion of issues such as the impact of decentralized finance and the question of whether the bank should issue its own digital currency, her experience would be very useful.”

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Bullock will make her first public speech as deputy governor on May 3 at a payments summit in Sydney.

Her appointment comes as global central banks and the private sector take firmer strides toward gender equality. The US Federal Reserve had been headed up by Janet Yellen and the European Central Bank is currently led by Christine Lagarde. In some parts of Asia, women dominate central banking and financial supervision, despite being in traditionally more patriarchal societies.

The RBA has faced criticism of being insular and lacking diversity, prompting commentators to suggest the time was ripe to look outside the bank after Debelle resigned.

“Bullock’s fairly quick appointment suggests that the RBA did not look externally, continuing a long-established tradition of promoting from within,” said Su-Lin Ong, head of Australian economic and fixed-income strategy at Royal Bank of Canada. Ong pointed out that unlike previous deputy governors, Bullock has not spent time overseeing economics.

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“From a markets perspective, we note that financial stability falls under her remit which will be particularly important as the rate cycle gets underway,” Ong said.

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Hawkins said he was not aware of any outsider better placed than Bullock for the role. “Even a very capable person from outside would face a steep learning curve,” he said.

Governor Lowe pledged to improve gender equality shortly after taking the helm at the RBA in late 2016, after being challenged by his then 15-year-old daughter about the dearth of females in senior roles. While women held four of five assistant governor posts — up from zero — the top two roles had remained the preserve of men.

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“I warmly congratulate Michele on her appointment,” Lowe said in a statement. “Michele brings a wealth of experience to the position. She has played a leading role in the bank’s work on financial stability and has a well-deserved international reputation for her work on payments systems.”

The RBA’s gender struggles mirror those in the nation’s private sector. While company boards are steadily moving toward gender balance, there’s still a lack of women in CEO roles.

Under Lowe, the RBA has made progress in filling more jobs with women. It has a longer term goal of 40% women in managerial positions, from 34.4% now. The gender pay gap at the RBA has declined to 14.5% under Lowe, better than the nationwide disparity of 22.8%.

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The paradox is that Australia is a global leader in women’s educational attainment, according to the World Economic Forum. Yet when it comes to women’s participation in the economy, it ranks 70th on the WEF’s list — behind Kazakhstan, Serbia and Zimbabwe.

Following Lowe’s elevation to governor in September 2016, Luci Ellis was appointed an assistant governor, overseeing economic analysis and research and acting as Lowe’s chief economic adviser. Bullock was named assistant governor for the financial system.

At the departmental level, Alexandra Heath is head of economic analysis, which advises on monetary policy, and Marion Kohler was named head of domestic markets, which implements policy.

Almost 10 years ago, Bloomberg interviewed Ellis, Bullock and Heath for a story on Australian women in economics. Asked at the time how far Australia was from having a woman run its central bank, Bullock concluded in her deadpan country style: “probably a while .”

It’s certainly getting closer.

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