The 10 best central bankers since the crisis
If you can name more than 25 central bankers, you’re probably a foreign exchange trader. Here are 10 central bankers who distinguished themselves since the crisis began.
3. Dallas Fed President Richard Fisher
In my mind, economic forecasting is the most important part of central banking. On that front, Fisher has been a failure. His repeated overly-optimistic forecasts and warnings about inflation have been way off the mark.
So why is he on my list? Every central bank needs some balance. Even at a time that calls for the most dovish monetary policy in history, there needs to be someone warning about the risks. Fisher is in the position to do that because he has no real power.
He also gets points because he is a great communicator. As we saw yesterday, he isn’t afraid to speak his mind but he remains relatively diplomatic and doesn’t fight battles as if they’re life and death. At the end of the day, he’s a good central banker but he would make a great politician.
2. St. Louis Fed President James Bullard
There is a good chance that Bullard will be FOMC president one day so keep an ear open when he’s speaking. He’s on my list because he has a rare talent — the ability to change his mind.
In the hyper-critical modern world, it’s a bigger sin to change your mind than to be wrong. But at the end of the day, isn’t the aim to get it right?
Bullard has seemingly been on both sides of every QE debate. As the facts changed, he changed. As any good FX trader knows, there is nothing wrong with that.
1. BOE MPC member David Blanchflower (2006-2009)
It’s tough to love a dove.
Hawks get all the respect in central banking; they are the ‘adults’ who warn about the long-term effects of looser policy now. Being a dove is equated with a panicky, worrisome personality.
Enter the crisis: The global financial system was collapsing yet so many central bankers were looking at lagging CPI numbers, warning about inflation. Most of them should have been dragged out of office years ago for their ineptitude.
Blanchflower was voting for rate cuts for a full year before the Bank of England finally figured out the global economy was in trouble (after Lehman collapsed).
He is a poor diplomat and has made enemies by repeatedly criticizing the Mervyn King-led Bank of England but he is out there (on twitter) telling it the way he sees it.
On my list, a central banker is like a foreign exchange trader — credits for for style are secondary, being right is what counts. Not many central banks saw the crisis as clearly as Blanchflower.
The rest of the list:
4. Ben Bernanke – a controversial figure because politicians have used him to score points but history will ultimately put him at the top of every list.
5. Fmr ECB vice president Lucas Papademos – Trichet’s right hand man was a steady hand throughout the crisis. He gets full points for resigning to be Prime Minister in Greece’s caretaker government after Papandreou abruptly quit.
6. Fmr Deputy RBA gov (2007-2012) Ric Battellino – This guy called the bottom of the crisis in Australia. He said things were getting better at the very depths of the crisis. I laughed at the time, but he was right. He loses points because later (including this year) he was far too hawkish.
7. Bundesbank chief Jens Weidmann – A welcome departure from the comical hawkishness of successive BUBA leaders.
8. BOC Governor Mark Carney – A model for modern central bank communication. He was also the fore-bearer of the ‘calendar-driven’ guidance that the Fed eventually adopted.
9. BOJ Governor Masaaki Shirakawa – Dealt an incredibly tough hand, having taken over in March 2008 and forced to deal with the tsunami disaster. Didn’t have many cards to play but he has battled.
10. Minneapolis Fed President Narayana Kocherlakota – He’s on my list for the same reason as Bullard, flexibility.