[FOUNTAIN]The power of a chief bankerHeads of central banks in most countries never say much. Whenever they appear on television news programs they seem the loneliest people in the world. A good example is Alan Greenspan, the chairman of the Federal Reserve Board, the central bank in the United States.
Despite reports that the American economy is in the recovery stage, Mr. Greenspan has never made this statement: "We are in economic recovery." Mr. Greenspan has a habit of beating around the bush, using expressions that ordinary people cannot readily comprehend. For example, Mr. Greenspan told the U.S. Congress that there exists preliminary indexes that indicate the economic contraction was coming to an end. He ended his speech with inexplicable words, instead of plainly saying the U.S. economy was in the process of recovery.
The Federal Reserve chairman's status, including his decision and behavior, has important implications for U.S. economic history. The government does not interfere with the independence of the central bank, and the Federal Reserve Board does not allow such interference. This is why Americans and U.S. stock markets trust the Federal Reserve. The policies of Mr. Greenspan, who has been chairman for 15 years, and Paul Volcker, the former chairman, have been highly regarded, and were called the Greenspan policy and the Volcker policy, instead of the Federal Reserve Board policy.
The Bank of Japan, which is Japan's central bank, has endured a rough path in its process to achieve independence. The lonely fight to overcome political control continued through the early 1990s. Shin Kanemaru, then vice president of the Liberal Democratic Party, even threatened the Bank of Japan, which refused to cut interest rates despite an economic slump, to lower interest rates, if necessary, by beheading the bank's chief. The most optimal candidate for governor of Japan's central bank is someone unafraid to stand up to the government.
A stronger deutsche mark was possible because of the independent monetary policy of the Bundesbank, Germany's central bank.
Park Seung, head of the Public Fund Oversight Committee, was appointed the 22d governor of the Bank of Korea. The Federal Reserve Board has had seven chairmen during its 67 years of existence, but the Bank of Korea has had 22 governors during the last 52 years. The many changes reflect our bumpy history. People's attention now is focused on whether the central bank will achieve independence and if the bank's new governor has enough authority.
The writer is a JoongAng Ilbo editorial writer.
by Choi Chul-joo