日銀
No surprise here: the DPJ is making good on its threat to oppose the Muto nomination:
Now that the ruling coalition doesn't control the upper house, it can't get its nominees through the Diet without the agreement of the DPJ. The DPJ argument against Muto--that he's a career bureaucrat who will compromise the central bank's independence--isn't one to be taken lightly. Muto was once Vice-Minister of Finance...meaning that he had risen through the ranks of appointed officials to become the official with the most real power in the ministry (more than the Minister of Finance himself, who's appointed by the current administration from on high and lacks the deep-rooted connections with ministry insiders). Japan has a lot of public debt, so the fear is that Muto will be too likely to keep interest rates down to gladden the hearts of federal bureaucrats by helping finance the (large) public debt. And word is that Muto is less committed, at least in the short term, to raising rates than Toshihiko Fukui, whom he'd be succeeding.
At the same time, I have yet to hear whether the DPJ has any bright ideas about who should get the job, and more bickering right now just gives foreign investors more reason--as if more were needed--to think Tokyo is seriously flaky and unreliable.
Apropos of nothing: I don't know much about the deputy governor nominees, but Wikipedia says that Ito is a disciple of Kenneth Arrow, who presumably directed his dissertation at Harvard.
The leadership of the Democratic Party of Japan met on 11 March and resolved not to agree to the the government's nomination of Bank of Japan Deputy Governor Toshiro Muto as its new governor. Regarding nominees for new deputy governors, it will oppose University of Tokyo Professor Takatoshi Ito but not University of Kyoto Professor Masaaki Shirakawa.
Now that the ruling coalition doesn't control the upper house, it can't get its nominees through the Diet without the agreement of the DPJ. The DPJ argument against Muto--that he's a career bureaucrat who will compromise the central bank's independence--isn't one to be taken lightly. Muto was once Vice-Minister of Finance...meaning that he had risen through the ranks of appointed officials to become the official with the most real power in the ministry (more than the Minister of Finance himself, who's appointed by the current administration from on high and lacks the deep-rooted connections with ministry insiders). Japan has a lot of public debt, so the fear is that Muto will be too likely to keep interest rates down to gladden the hearts of federal bureaucrats by helping finance the (large) public debt. And word is that Muto is less committed, at least in the short term, to raising rates than Toshihiko Fukui, whom he'd be succeeding.
At the same time, I have yet to hear whether the DPJ has any bright ideas about who should get the job, and more bickering right now just gives foreign investors more reason--as if more were needed--to think Tokyo is seriously flaky and unreliable.
Apropos of nothing: I don't know much about the deputy governor nominees, but Wikipedia says that Ito is a disciple of Kenneth Arrow, who presumably directed his dissertation at Harvard.
Posted by Sean on
2008-03-11 21:49:01