RBA deputy governor Debelle resigns to work for Twiggy Forrest

Reserve Bank deputy governor Guy Debelle shock resignation to join Fortescue Future Industries comes at a critical moment.

RBA deputy governor Guy Debelle says he is determined to contribute more directly to the country’s decarbonisation challenge. Picture: AAP

Reserve Bank deputy governor Guy Debelle will step down from the peak of monetary policymaking to pursue his passion for environmental issues by joining billionaire Andrew Forrest’s Fortescue Future Industries.

Dr Debelle’s resignation after nearly three decades with the central bank came as a shock to those inside the RBA, and across financial markets.

The news also sparked immediate speculation around who would replace him at a critical moment for the economy and monetary policy, amid a global energy shock and on the cusp of the first rate rise in more than a decade.

Dr Debelle told The Australian his determination to contribute more directly to the country’s decarbonisation challenge sparked his decision to take the position of chief financial officer at FFI, which aims to make “renewable green hydrogen the most globally traded seaborne energy commodity in the world”.

“It’s different, but it’s something where I can make a really big difference helping FFI achieve what they want to achieve,” Dr Debelle said, explaining that the role offered the opportunity to work “on something I really care about”.

“Rather than providing a framework for climate financing, I can actually do it; and there’s a lot of opportunity here for Australia,” he said.

Dr Debelle informed the RBA board of his decision on Tuesday, with senior colleagues only told on Thursday.

He said his decision was not driven by any schism with his colleagues at the central bank.

“It’s just about the opportunity. I am absolutely happy here (at the RBA) for sure. I am completely aligned with Phil (Philip Lowe, the governor), and he will continue to be a very close friend of mine,” he said.

“It (the FFI job opportunity) came to me; I wasn’t looking for it,” he added.

Despite his comments, the ­announcement raised eyebrows among seasoned RBA watchers.

Dr Debelle was appointed deputy governor in 2016 having worked for the central bank since 1994, and was the heir apparent to Dr Lowe, whose statutory seven-year term ends in 18 months.

Dr Debelle will step down next Wednesday, leaving succession plans for Dr Lowe – whose term can be extended – wide open. Observers said on Thursday the resignation made it more likely Dr Lowe would stay on to smooth the path for his successor.

Josh Frydenberg said he would appoint a new deputy governor “in due course”, and thanked Dr Debelle “for his outstanding contribution to the RBA over nearly three decades including the past six years as deputy governor”.

Dr Lowe also thanked Dr Debelle for his “outstanding service”.

“Guy has been a great colleague and I wish him all the best in his new position,” Dr Lowe said on Thursday.

Both major parties have committed to a review of the RBA’s monetary policy practices and structure after the election.

Opposition Treasury spokesman Jim Chalmers said “the ­vacancy created by his departure represents an important opportunity for renewal, and to promote more women into the most senior ranks in particular”.

“Federal Labor expects to be properly consulted on this appointment, especially given the proximity to the election,” Dr Chalmers added.

Most who spoke to The Australian said they expected the Treasurer would look to appoint a woman to the deputy role and that, following tradition, the most likely candidate would come from within the central bank.

The most obvious contenders, therefore, were assistant governors Luci Ellis and Michele Bullock, as well as Alex Heath, head of the bank’s international department. Assistant governor Chris Kent was also a strong candidate.

Others said Dr Debelle’s replacement as RBA deputy governor could come from one of the country’s leading economic institutions, such as Treasury.

Former colleagues, as well as current and former fellow board members, praised Dr Debelle’s intellect and drive, saying he had a “forthright” character that complemented governor Dr Lowe’s more congenial manner.

None of the people who spoke to The Australian on or off the record said there was any evidence that a friction within the bank had led to Dr Debelle’s resignation, but all expressed surprise.

RBA board member Ian Harper told The Australian he “wasn’t expecting Guy to resign”.

“But I think it’s a very exciting opportunity he’s been offered, and it’s something – as I wrote to him after I received the news – that is a pivotal opportunity to use his prodigious talent and energy to influence Australia’s energy transition,” Dr Harper said.

The loss of one of the country’s most experienced and smartest central bankers comes as Dr Lowe prepares to raise rates this year for the first time since November 2010, and amid incredible uncertainty at home and abroad at the tail end of global pandemic and amid the worst energy shock in three decades.

But former RBA board member and ANU economics professor Warwick McKibbin was sanguine, saying there was “a lot of depth in the bank”.

“My guess is it will be an internal appointment and they will go for an external candidate for governor next time,” Professor McKibbin said.

Fortescue founder and chairman Andrew Forrest in a statement said: “Bringing in someone of Dr Debelle’s economic credibility goes to the heart of our ­vision for FFI. Not only are we committed to arresting climate change, we are also committed to creating economic growth, increasing jobs and growing profitability,” he said.