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Debelle promoted to RBA deputy governor

AAP logoAAP 2/09/2016

Long-serving economist Guy Debelle will be the new deputy governor of the Reserve Bank of Australia.

Dr Debelle is currently the assistant governor for financial markets at the RBA, and has worked at the central bank since 1994.

He previously worked at the International Monetary Fund and the Australian Treasury department.

Dr Debelle will take over from current deputy governor Philip Lowe, who will replace Glenn Stevens as RBA governor on September 18.

Dr Debelle, who is fond of including references to Brisbane proto-punk band The Saints in his speeches on the financial system, will bring a pragmatic approach to the role.

In the wake of the global financial crisis, he focused on the nuts and bolts of finance, especially the way market players were prone to misprice the risk in financial instruments.

"There are known unknowns and unknown unknowns, which complicate the pricing of risk, but over the past decade, there has also been a fair few examples of 'too-lazy-to-be-knowns'," he said in a speech in 2012.

Dr Debelle capped off that speech with a warning that market participants should heed the advice of The Saints' hit song "Know Your Product".

After nine years as assistant governor for financial markets, Dr Debelle also brings a healthy awareness of the risks of relying too heavily on economic theory in trying to understand how financial markets work.

In a panel discussion in 2014, he said finance had been neglected in macroeconomics.

"It was just assumed to be there and it broadly was assumed to function," he said.

"Obviously the last few years demonstrate that's not true."

And he said it was a mistake to assume that the way finance works is unimportant.

"The way the financial system actually functions does matter," he said.

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