This month, as Glenn Stevens steps down from his role as RBA Governor, he’s succeeded by Philip Lowe. Mozo took a look at who Philip Lowe is and his credentials for running the Reserve Bank of Australia.
It was announced in May this year that Lowe would be taking over the position when Glenn Stevens retired in September. That was the same month that the RBA made waves by cutting rates to a historically low 1.75%.
Lowe has held the position of deputy governor since early 2012, but his involvement with the banking sector has been a near life-long affair - he finished high school in regional Wagga Wagga, before moving to Sydney to join the Reserve Bank at just 17 years old.
The RBA sponsored him to complete a commerce degree at the University of NSW and afterwards, he completed a PhD at the Massachusetts Institute of Technology. This was the same institute attended by numerous central bankers around the world, including the president of the European Central Bank and the former US Federal Reserve chairman.
He also did a two year stint at the Bank for International Settlements, during which he authored important research on the role of central banks in low inflation conditions, which puts him in good stead to handle the current state of Australia’s economy.
In a speech earlier this year, Lowe commented that, "In earlier decades, it was very rare for central banks to worry that inflation and inflation expectations were too low. Yet today, we hear this concern quite often, and the 'unconventional' has almost become conventional."
Interest rates at home and around the world have been inching ever closer to zero lately, and a number have even already dipped into the negatives, causing uncertainty among banking experts. How Lowe will handle Australia’s record low interest rates, which are tipped to slide even lower in the coming months, remains to be seen.
Outgoing Governor Glenn Stevens, however, was confident that Lowe was up to the task and that the RBA was being left "in the very best of hands.”
"The Reserve Bank will, I am confident, go from strength to strength under the leadership of its new governor," he said, in his final speech this month.Fun facts about Philip Lowe:
- He met his wife Jocelyn Parker while working at the RBA. She now works at APRA.
- He has at times been given the moniker “Tintin” for his red hair and neat presentation.
- He was dux of both his junior and senior high schools.
- He was described as "one of the finest Australian economists of his generation" by Shadow Treasurer Chris Bowen.
- In the early 1990s, he pushed the idea that it’s a central bank's job to keep a watch out for asset price bubbles and intervene when they looked like getting out of control - which was an unheard of opinion at the time, but is now much more widely accepted.