IMF Not Concerned With Empty Bank of Japan Governor Seat
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The failure to find a Japan central bank
governor does not pose any problems to the International Monetary Fund,
even with apprehension in the global community as to whether or not the
world’s second largest economy is able to play an interactive role
during the ongoing turmoil in the financial and credit markets.
“We don’t expect that the delay in appointing a new governor to the
bank of Japan will affect the conduct of monetary policy and look
forward to an appointment being made,” David Hawley, IMF senior advisor
for external relations aid during a biweekly briefing.
The top job has been open since Wednesday and the latest nominee
from Prime Minister Yasuo Fukuda was recently rejected. Political
opposition in parliament has left the unprecedented vacancy at the BOJ.
The Deputy Governor Masaaki Shirakawa is acting as governor until the
successor is conferred by the government.
In regards to the ongoing financial stress deepening, Hawley said
the IMF holds the view that the European Central Bank’s is appropriately
on hold and policymakers should implement quick reactions if economic
conditions change.
“The ECB needs to stand ready to respond flexibility to downside
risks to growth intensify and inflation risks decline,” he said.
He said the IMF welcomed the active role by the Federal Reserve and
the monetary policy steps have been necessary to support the capability
of financial markets to function. The main motivation behind the Fed’s
aggressive actions was to protect the financial system, he said.
“The Fund’s position is that the decisive action by the Fed has
been appropriate as the Managing Director noted earlier this week,”
Hawley said.
In conjunction with the Fed’s recent moves, Hawley said fiscal
stimulus is appropriate as the U.S. government hopes it gives economic
growth a bounce. “Timely, targeted, and temporary fiscal stimulus is
warranted,” he said.
While the IMF is currently assessing its global outlook, the Board
is expected to release a guide on ‘best practices’ code for
sovereign-wealth funds Friday.
The next meeting for central bankers is on April 12, where the a
Group of Seven is scheduled to meet. He said analytical chapters of the
IMF’s world economic outlook will be released on April 3. The chapters
will cover: the changing housing cycle and implications of monetary
policy, climate change in the global economy, globilization, and
commodity prices in developing countries.
Filed by Anita Li under International Financial Architecture Reform, Financial Supervision, Corporate and Public Governance