The proposition of a national bank in Australia began to be raised in the middle of the 19th century.
This interest accelerated significantly in the 1890s due to an austere collapse of the financial and banking sectors at the beginning of that decade.
The Australian Labor Party consequently formed during the same decade and proposed a bank should be formed, which would be a protected and cheap way of having financial services.
The party designed a platform in 1908 for a "Commonwealth Bank", which would be a combination of both a commercial and central bank.

Regardless, Fisher's Labor government introduced legislation in 1911 for a government-owned commercial bank, without a complete central banking component.
He stated that "Time and experience will show how its functions for usefulness may be extended [towards central banking]."
The only function at the time that made the bank characteristic of a central one was that it was the banker to the Australian government, in addition to it being the same for the states.
For the time being, the Treasury of Australia maintained the role of issuing bank notes through the Australian Notes Act 1910.

The Commonwealth Bank of Australia gradually developed into the central bank of Australia.
In response to the disruption of trade during World War I (1914–1918) the Commonwealth Bank began to manage the debt of the Australian government.
Nevertheless, at the end of the war, the bank continued to have a primary role as a savings and trading bank.
World War I had caused the currency of Australia to move away from the gold standard, in order to fund a great increase of government spending, as did the United Kingdom and other parts of the British Empire.

The value of the Australian pound remained tied to the pound sterling.
Inflation in Australia thus increased, less than in Britain, but more than in the United States.
The case for a central bank was increased by the need for the government to cut spending after the war to reduce its debt.
Commonwealth Bank Governor Denison Miller had been arguing for the issue of Australian currency to be switched from the treasury to the bank, as it had more staff and more monetary knowledge.

The Australian Notes Board (ANB) was created in 1920 and partially acceded to the request of Miller, in having four directors, with the governor of the bank being an ex officio member.
The ANB began to follow a policy of board member John Garvan, in contracting the money supply, with the goal of reducing prices so that free convertibility of the Australian pound to gold could be re-established at pre-war rates, that is return to the former gold standard.

This was accomplished by refusing the exchange of notes for gold and it was hoped that this would lower domestic prices and raise the exchange rate for the Australian pound.
When gold arrived from New York the government sold securities in order to diminish the effect of monetary expansion, therefore executing the first open market operations in the history of Australia and thus the first attempt of central banking.
The proposition of a national bank in Australia began to be raised in the middle of the 19th century. This interest accelerated significantly in the 1890s due to an austere collapse of the financial and banking sectors at the beginning of that decade. The Australian Labor Party consequently formed during the same decade and proposed a bank should be formed, which would be a protected and cheap way of having financial services. The party designed a platform in 1908 for a "Commonwealth Bank", which would be a combination of both a commercial and central bank.
Regardless, Fisher's Labor government introduced legislation in 1911 for a government-owned commercial bank, without a complete central banking component. He stated that "Time and experience will show how its functions for usefulness may be extended [towards central banking]." The only function at the time that made the bank characteristic of a central one was that it was the banker to the Australian government, in addition to it being the same for the states. For the time being, the Treasury of Australia maintained the role of issuing bank notes through the Australian Notes Act 1910.
The Commonwealth Bank of Australia gradually developed into the central bank of Australia. In response to the disruption of trade during World War I (1914–1918) the Commonwealth Bank began to manage the debt of the Australian government. Nevertheless, at the end of the war, the bank continued to have a primary role as a savings and trading bank. World War I had caused the currency of Australia to move away from the gold standard, in order to fund a great increase of government spending, as did the United Kingdom and other parts of the British Empire.
The value of the Australian pound remained tied to the pound sterling. Inflation in Australia thus increased, less than in Britain, but more than in the United States. The case for a central bank was increased by the need for the government to cut spending after the war to reduce its debt. Commonwealth Bank Governor Denison Miller had been arguing for the issue of Australian currency to be switched from the treasury to the bank, as it had more staff and more monetary knowledge.
The Australian Notes Board (ANB) was created in 1920 and partially acceded to the request of Miller, in having four directors, with the governor of the bank being an ex officio member. The ANB began to follow a policy of board member John Garvan, in contracting the money supply, with the goal of reducing prices so that free convertibility of the Australian pound to gold could be re-established at pre-war rates, that is return to the former gold standard.
This was accomplished by refusing the exchange of notes for gold and it was hoped that this would lower domestic prices and raise the exchange rate for the Australian pound. When gold arrived from New York the government sold securities in order to diminish the effect of monetary expansion, therefore executing the first open market operations in the history of Australia and thus the first attempt of central banking.
Reserve Bank of Australia