Good move. Up to the rolling of Tony Abbott last September, one rumour just wouldn’t go away: that they would look outside the Reserve Bank for a new governor when time came in 2016 to find a replacement for Glenn Stevens, who steps down on September 17. It was a rumour that worried the upper level of the bank, and had several senior officials looking outside for boltholes in the event that deputy Phil Lowe was not given the job. Tony Abbott and his chief of staff Peta Credlin were said to be still be unhappy with the central bank and the way it put up interest rates in the 2007 election campaign. They were said to be assembling a list of candidates from outside the bank. And the unease inside upper levels of the bank was easy to understand because Abbott and Credlin had blood on their hands when, soon after the Coalition won the 2013 poll, they sacked three well-regarded departmental heads including two -- Andrew Metcalfe and Martin Parkinson -- who were among the best of the Rudd-Abbott era.

Parkinson’s sacking was, for those at the top of Martin Place in Sydney, the big shock. He was the head of Treasury, sat in on every monthly board member as the federal government’s representative, and was highly regarded, from Glenn Stevens down, for his ability and integrity. It did not help matters when the unlamented Joe Hockey was forced to ask Abbott to keep Parkinson to stay on to help not only with the 2014-15 budget but the Group of 20 meeting in Brisbane later that year. Parkinson had the global contacts among his peers in the G20, as well as the IMF, World Bank and OECD, the ADB -- the key global economic bodies so far as Australia was concerned. The man who Abbott and Credlin had lined up to replace Parkinson, John Fraser -- a former senior Treasury official (whose mentor was John Stone, a conservative former head of Treasury) -- was an unknown globally because he had been tucked away at UBS (the big Swiss bank), running their asset management business around the GFC, which almost collapsed UBS but for a bailout by the Swiss central bank and taxpayers. -- Glenn Dyer