Reserve Bank of Australia (RBA) Governor Glenn Stevens delivers a speech in Sydney July 26, 2011. Australia's households have already proceeded a long way in adjusting their consumption habits to lift savings rates and improve their balance sheet, the head of the country's central bank said on Tuesday.  REUTERS/Tim Wimborne (AUSTRALIA - Tags: BUSINESS)

Facing increasing pressure to explain himself ... Glenn Stevens. Photo: Reuters

THE federal government has expressed full confidence in the Reserve Bank governor, Glenn Stevens, as calls grow for a judicial inquiry into allegations that subsidiary companies of the bank bribed foreign officials to secure note-printing contracts.

Mr Stevens faces calls from the opposition to explain himself before a special hearing of a parliamentary economics committee while the Greens, key independents and the former Liberal leader John Hewson said a royal commission was needed.

Two subsidiary companies of the Reserve Bank are accused of bribing foreign officials to win note-printing contracts. It has been alleged that senior officials at the Reserve Bank were told of the allegations by a whistleblower in 2007, but the bank did not call the federal police until 2009, after the allegations were published in the Herald.

<i>Illustration: Spooner</i>

Illustration: John Spooner

A spokesman for the Treasurer, Wayne Swan, said it would be inappropriate to have an inquiry while the matter was before the courts.

''The RBA has responded to these matters, noting that it has co-operated fully with the legal authorities and that its executives have acted in good faith and with integrity,'' he said.

''Many of these matters are still before the courts. The RBA is fully co-operating with the Commonwealth Director of Public Prosecutions as part of these proceedings. Given the court's consideration is ongoing, it's not appropriate for the Parliament to consider these matters further at this time. The Treasurer has full confidence in the governor of the Reserve Bank.''

The shadow treasurer, Joe Hockey, declined to comment but the Liberal MP and member of the house economics committee Tony Smith said the next committee hearing should be brought forward.

''The house economics committee is the parliamentary oversight committee for the Reserve Bank … I think there should be a special dedicated hearing of the committee scheduled for the near future to examine all matters relevant to Note Printing Australia and Securency,'' he said.

''Ordinarily, the committee would not meet with the bank again until February next year. Clearly it would be ridiculous to postpone further questioning until then.''

The independent senator Nick Xenophon said the delay in going to the police looked like a ''chasm in the bank's credibility'' and Mr Stevens's explanation so far had been ''unsatisfactory.''

''He has a fundamental obligation to explain what has occurred and he has failed to fulfil what is a duty to the Australian people to explain the reasons for the delay,'' Senator Xenophon said.

''The longer we wait for an explanation in the delay in the Reserve Bank going to the police, the worse it looks for Mr Stevens and the Reserve Bank.''

The independent MP Andrew Wilkie and the Greens said there needed to be a full inquiry, such as a royal commission.

''One of the big unanswered questions is what were the governance standards in the Reserve Bank and why did it take so long to contact the police after senior officials were made aware of serious allegations,'' the Greens MP Adam Bandt said.

Mr Hewson said there had been a cover-up.

''There should be a royal commission in order to get to the bottom of the whole affair,'' he said.