Macro Musings with David Beckworth Laurence Bristow on What the Fed can Learn from the Reserve Bank of Australia
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Dec 8, 2025 Laurence Bristow, former staffer at the Reserve Bank of Australia and now Vice President at the Bank Policy Institute, shares invaluable insights on central banking. He compares the RBA’s restructuring with the Fed, highlighting the motivation for adopting a demand-driven system. Laurence explains the benefits of a flexible ceiling system that promotes interbank activity and market stability. He discusses the implications for U.S. monetary policy reforms, emphasizing lessons the Fed can learn from the RBA's experience in navigating reserve management.
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From RBA Staffer To BPI Researcher
- Laurence Bristow described his path from University of Queensland to the RBA and then to the Bank Policy Institute in Washington DC.
- He explained his roles at the RBA managing foreign reserves, domestic risk, and later working on the monetary policy implementation review.
RBA Target And New Governance
- The RBA uses a flexible inflation target of 2–3% and aims for the midpoint of that range.
- Recent governance changes added a board for operations separate from monetary policy decisions.
How Australia Handles Emergency Liquidity
- Bristow described Australia's lending facilities: an overnight standing facility and exceptional liquidity assistance.
- He noted stigma historically attached and coordination with the prudential regulator when those facilities are used.