Australia’s Central Bank Restricts Canadian Investment Bank from Private Briefings Following Leak

Australia’s central bank has decided to prohibit Canada’s global investment bank from participating in confidential briefings after details from a private meeting were leaked, according to two sources familiar with the situation. This marks the second occurrence of such a leak, following criticism faced by the Reserve Bank of Australia (RBA) last year when then-Governor Philip Lowe held a private session with traders at a meeting hosted by Barrenjoey Capital Partners, following a surprising hawkish announcement on interest rates.

In February, Assistant Governor Christopher Kent met with economists and trading clients from RBC Capital Markets, the investment banking division of the Royal Bank of Canada, after the RBA opted to maintain the cash rate at 4.35%. Sources indicated that the discussions were not meant for public disclosure.

Subsequent to this meeting, RBC’s trading client disclosed information from the briefing to an external associate. Upon discovering this breach, RBC proactively informed the RBA, which resulted in a 12-month ban for the bank. Both RBC Capital Markets and the RBA have refrained from commenting on the situation.

The Australian Financial Review was the first to report this development. Michele Bullock succeeded Philip Lowe as RBA governor in September of the previous year, and Lowe joined the board of Barrenjoey last month.

In response to inquiries regarding the incident, Australia’s Treasurer Jim Chalmers emphasized that it is not the government’s role to oversee or regulate agreements between the Reserve Bank and commercial banks. “I do share the concern that some elements of confidentiality may have been breached, and I’m sure that our colleagues at the bank are working through what that means for the way that they conduct those briefings and who’s involved,” Chalmers stated during a news briefing in Canberra.