Westpac Banking Corp.’s Bill Evans will switch out of the chief economist role he has held for more than 30 years and be replaced by Reserve Bank Assistant Governor Luci Ellis, in a significant change for both institutions.
The RBA confirmed Ellis’s departure and Westpac said she will take up her new role on Oct. 9. Ellis oversaw economic forecasting at the central bank and was Governor Philip Lowe’s chief economic adviser.
Ellis told Bloomberg Monday that having been at the RBA for 32 years, replacing Bill was “an opportunity I simply couldn’t pass up.” Marion Kohler will act as assistant governor responsible for economics and the role will be advertised both internally and externally.
“There does seem to be more movement now to the private sector from the RBA,” said Diana Mousina, deputy chief economist at AMP Capital Markets. “It’s definitely nice to have anther female chief economist. I think it’s really important and it’s a good signal. There’s definitely not enough,” Mousina said, adding it’s a “surprise that Bill’s going to be around too as a senior adviser.”
Evans, who joined Westpac at the height of the 1991 recession, has been one of Australia’s pre-eminent economists, particularly when it comes to picking turning points in RBA policy cycles. His most-memorable call came in July 2011 when he predicted an easing cycle — sending markets gyrating — at a time when most economists were still forecasting interest-rate hikes.
Evans proved correct as the RBA began lowering borrowing costs in November 2011, in an easing cycle that would persist through to the pandemic.
Westpac’s Evans Goes From Zero to Hero With Australia Rate Call
Westpac Chief Executive Officer Peter King said in a statement that Evans has defined the role of a major bank chief economist in Australia. Evans will remain with the bank as a senior economic adviser from January 2024.
The announcement of Ellis replacing Evans comes as Treasurer Jim Chalmers is due to decide on the next governor of the RBA, with Lowe’s term expiring in mid-September. The announcement adds to a drift of officials with PhDs away from the central bank, said Jonathan Kearns, who headed up domestic markets until March.
These include: Tony Richards, a former head of payments who retired; Guy Debelle, a former deputy governor who left for the private sector; Alex Heath, head of the International Department who is on an extended secondment to Treasury; Adam Cagliarini, a deputy head in Payments Policy, seconded to APRA; Kearns and now Ellis.
“I don’t think there has been any inflow to replenish the stocks,” said Kearns, now chief economist at money manager Challenger Ltd. “There’s certainly much less experience there.”
Should Governor Lowe fail to be reappointed, the loss of experience at the central bank would increase further.
--With assistance from Tim Smith.
(Adds comments from economists background.)
