Challenge before the SBP governor
SBP Governor is not the malleable sort but will he release reports of financial malfeasance at NBP & Bank of Punjab?
For the first time in several decades, the occupant of the governor’s office at the State Bank of Pakistan is a man who was familiar with the institution before being given the job. Having been the deputy governor since March 2007, Yaseen Anwar has been around the central bank for some time, an experience we hope will come in handy as he takes up the top job on a more permanent basis, having served as interim governor twice.
There has been much speculation about whether Anwar was the most appropriate choice for the job. We have no reason to believe that a man who has nearly 40 years of experience in international banking, as well as working within the operational heart of the State Bank itself, is not up to the task. Whether he is able to resist political pressures and maintain the central bank’s independence remains to be seen, but we believe he deserves a fair chance.
Many have speculated that the most recent cut in interest rates was made under political duress by a man who was eager to please the government. Yet, what many often forget is that the last time Anwar was serving as acting governor, he raised interest rates, suggesting that he is not quite the malleable sort he is being made out to be. The governor’s central challenge now will be to maintain the health of a financial system that has a worrying number of struggling banks, all the while ensuring that businesses get better access to credit. And did we mention that he has to do all of this while keeping a check on inflation?
We wish the governor luck in his new job, but we also have some requests. He could start, for instance, by releasing the central bank’s investigation reports into allegations of financial malfeasance at the state-owned National Bank and the Bank of Punjab. No financial system can possibly hope to maintain the confidence of the public if there are serious question marks over the creditworthiness of two of the 10 largest banks in the country.
We would also hope that the governor is able to curb government borrowing from the central bank itself, an act that does little except spur inflation to ever greater heights.
Published in The Express Tribune, October 30th, 2011.
There has been much speculation about whether Anwar was the most appropriate choice for the job. We have no reason to believe that a man who has nearly 40 years of experience in international banking, as well as working within the operational heart of the State Bank itself, is not up to the task. Whether he is able to resist political pressures and maintain the central bank’s independence remains to be seen, but we believe he deserves a fair chance.
Many have speculated that the most recent cut in interest rates was made under political duress by a man who was eager to please the government. Yet, what many often forget is that the last time Anwar was serving as acting governor, he raised interest rates, suggesting that he is not quite the malleable sort he is being made out to be. The governor’s central challenge now will be to maintain the health of a financial system that has a worrying number of struggling banks, all the while ensuring that businesses get better access to credit. And did we mention that he has to do all of this while keeping a check on inflation?
We wish the governor luck in his new job, but we also have some requests. He could start, for instance, by releasing the central bank’s investigation reports into allegations of financial malfeasance at the state-owned National Bank and the Bank of Punjab. No financial system can possibly hope to maintain the confidence of the public if there are serious question marks over the creditworthiness of two of the 10 largest banks in the country.
We would also hope that the governor is able to curb government borrowing from the central bank itself, an act that does little except spur inflation to ever greater heights.
Published in The Express Tribune, October 30th, 2011.