Head of MAS Ravi Menon only gets a ‘B’ grade

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Head of MAS Ravi Menon only gets a ‘B’ grade
DMCA.com October 27th, 2013 | Author: Editorial

Ravi Menon, MD of MAS (Photo MAS)

Despite the fact that Mr Tharman was named “Finance Minister of the Year 2013″ by the leading financial publication Euromoney this month (‘Tharman named Finance Minister of the Year 2013‘), Singapore’s head of Monetary Authority of Singapore (MAS), Ravi Menon, has only managed to obtain a ‘B’ rating as a measurement of his performance as a central banker.

In a recent report [Link], the Global Finance magazine has named the heads of the central banks of Malaysia, the Philippines and Taiwan as the World’s Best Central Bankers for 2013, in recognition of their achievement of an ‘A’ rating on Global Finance’s Central Banker Report Cards. In addition, the central bankers of Chile and the European Union earned ‘A-’ ratings.

They were followed by the central bankers of Colombia, Peru, United States, Turkey, Australia, Kazakhstan, South Korea, Thailand, Kenya and Saudi Arabia, who all earned ‘B+’ ratings.

As can be seen, Mr Menon’s performance was below that of his fellow central bankers from Malaysia, the Philippines, Taiwan, South Korea and Thailand in Asia.

The Central Banker Report Cards, published annually by Global Finance since 1994, grades central bank governors of more than 50 key countries (and the European Union) on an ‘A’ to ‘F’ scale for success in areas such as:

inflation control
economic growth
currency stability
interest-rate management
determination of central bankers to protect their independence in the face of political interference

Global Finance publisher Joseph Giarraputo notes, “As developed economies begin the gradual route to recovery and some of the largest emerging markets continue to slow, the world’s central bankers face a challenging time in managing monetary policy to positively influence economic stability and growth.”

“Every year, we assess the determination of central bankers to stand up to political interference and their efforts at influencing their governments on such issues as spending and economic openness to foreign investment and financial services.“

All in all, this year’s class of central bankers has done a fairly good job of restoring financial and economic stability but with more room for improvement in some cases. The average grade was a ‘B-’, the same as last year. There were three ‘A’ grades (all in the Asia-Pacific region), as well as 2 ‘A-’ and 2 ‘D’ grades:
Central Banker Report Cards
Country Central Bank Governors 2013 Grade 2012 Grade
Malaysia Zeti Akhtar Aziz A A
Philippines Amando Tetangco Jr. A A
Taiwan Fai-Nan Perng A A
Chile Rodrigo Vergara A- B+
European Union Mario Draghi A- B
Colombia José Darío Uribe Escobar B+ B
Peru Julio Velarde Flores B+ B
United States Ben Bernanke B+ B
Turkey Erdem Başçi B+ B
Australia Glenn Stevens B+ A
Kazakhstan Grigory Marchenko B+ B+
South Korea Kim Choongsoo B+ C
Thailand Prasarn Trairatvorakul B+ B+
Kenya Njuguna Ndung’u B+ B
Saudi Arabia Fahad Al-Mubarak B+ B+
Brazil Alexandre Tombini B B
Mexico Agustin Carstens B B+
Poland Marek Belka B B
Sweden Stefan Ingves B B
Switzerland Thomas Jordan B Too early to say
Hong Kong Norman Chan B N/A**
New Zealand Graeme Wheeler B N/A*
Singapore Ravi Menon B B
Sri Lanka Ajith Nivard Cabraal B B
Angola José de Lima Massano B B
Bahrain Rasheed Mohammed Al-Maraj B B
Kuwait Mohammad Yusuf Al-Hashel B Too early to say
Lebanon Riad Salameh B C
Morocco Abdellatif Jouahri B B
Czech Republic Miroslav Singer B- B
Norway Øystein Olsen B- B
Qatar Abdullah Saud Al-Thani B- B
United Arab Emirates Sultan bin Nasser Al-Suwaidi B- B
Nigeria Sanusi Lamido Sanusi C+ B+
Belarus Nadezhda Ermakova C C
Bangladesh Atiur Rahman C C
China Zhou Xiaochuan C B
Vietnam Nguyễn Văn Bình C C
Algeria Mohammed $$$$$ci C C
South Africa Gill Marcus C C
Ethiopia Teklewold Atnafu C- C
Argentina Mercedes Marcó del Pont D D
Ecuador Diego Martinez D N/A*
Canada Stephen Poloz Too early to say N/A*
Hungary György Matolcsy Too early to say N/A*
Russia Elvira Nabiullina Too early to say N/A*
Ukraine Ihor Sorkin Too early to say N/A*
United Kingdom Mark Carney Too early to say N/A*
India Raghuram Rajan Too early to say N/A*
Indonesia Agus Martowardojo Too early to say N/A*
Japan Haruhiko Kuroda Too early to say N/A*
Israel - Too early to say N/A*

*Central Bank governor was graded in 2012, however a different governor held the office.
**New country addition to the Central Bank Report Cards in 2013, therefore no grade was given in 2012.

Global Finance made the following comments on Ravi Menon, Managing Director of MAS [Link]:

SINGAPORE
Ravi Menon

GRADE: B

Menon in June began an additional two-year term as managing director of the Monetary Authority of Singapore. The MAS manages the Singapore dollar exchange rate against a basket of currencies to keep it within an undisclosed target band. It lowered its inflation forecast in July to a range of 2% to 3% in 2013 and kept its economic growth forecast unchanged at 1% to 3% for the year. “For the first time in three years, inflation has come down closer to historical trends and within MAS’s comfort range,” Menon said.

The central bank is an institution that manages a country’s currency, money supply, and interest rates. It also usually oversees the commercial banking system in the country. The central bank possesses a monopoly on increasing the amount of money in the nation, and usually also prints the national currency.

The primary function of a central bank is to manage the nation’s money supply (monetary policy), through active duties such as managing interest rates, setting the reserve requirement, and acting as a lender of last resort to the banking sector during times of bank insolvency or financial crisis. Central banks usually also have supervisory powers, intended to prevent bank runs and to reduce the risk that commercial banks and other financial institutions engage in reckless or fraudulent behavior. Central banks in most developed nations are institutionally designed to be independent from political interference.

It’s not known if it was the last criteria – independence from political interference – which dragged down Mr Menon’s performance as a responsible central banker, in the view of Global Finance.


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