Former Reserve Bank governor Bernie Fraser says the Federal Treasurer should be examining excessive private sector salaries when considering the remuneration package for the head of the Reserve Bank.

Wayne Swan has moved to strip the RBA of its ability to set its own pay rates for board members and executives.

It comes in the wake of the RBA remuneration committee's decision to approve a $234,000 pay increase for governor Glenn Stevens, taking his total pay package to $1.05 million - almost triple what Prime Minister Julia Gillard earns.

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The RBA will now come under the Remuneration Tribunal, which also determines politicians' pay.

Mr Fraser has defended Mr Stevens's salary, saying his role is of vital importance to Australia and that he works hard to earn his $1 million pay packet.

"There's a lot of responsibility on the decision making and the wisdom of the central bank governor," he told business editor Peter Ryan.

"And in terms of relativities with salaries in the community generally, while $1 million is a lot of money, it's not out of kilter with the responsibilities that go with it."

Mr Stevens is paid significantly more than US Federal Reserve chairman Ben Bernanke ($199,700) and European Central Bank president Jean-Claude Trichet ($504,900).

But Mr Fraser says there is no benchmark rate for central bank governors' salaries.

"Not only the CEOs of the private banks, but 10, 20, 30 of the top senior people in those institutions earn more than well over $1 million," he said.

Reserve Bank governor Glenn Stevens. ( Dean Lewins: AAP )

"I think if you line up the responsibilities and the independence and the judgments that have to be made, it's modest compared to the market."

Mr Swan criticised Mr Stevens's pay package earlier this year, saying it was not in line with community standards.

But Mr Fraser says the specific amount is not important as long as it is enough to attract the right person for the job.

"The Remuneration Tribunal might be a bit more modest [in awarding salary increases], but as I said... the absolute amount of the salary is not the important thing; it is either attracting or keeping good people in those sorts of positions," he said.