The author has been described by News Ltd as an "iconoclast", "Svengali", a pollie's "economist muse", and "pungently accurate". Fairfax says he is a "Renaissance man" and "one of Australia’s most respected analysts." Stephen Koukoulas concludes that he is "85% right", and "would make a great Opposition leader." Terry McCrann claims the author thinks "‘nuance’ is a trendy village in the south of France", but can be "scintillating" when he thinks "clearly". The ACTU reckons he’s "an enigma wrapped in a Bloomberg terminal, wrapped in some apparently well-honed abs."

Tuesday, February 1, 2011

The Australian: Bernie Fraser backs Warwick McKibbin (+ Bloxham & Joye)

Well it is hard to get a better endorsement than this. Former RBA Governor (appointed by Paul Keating), Treasury Secretary, industry fund and Members Equity Bank leader, Bernie Fraser, has come out and backed Professor Warwick McKibbin in The Australian today in the strongest possible terms (also quotes Bloxham and me). It is really important that we do not politicise the RBA Board:

"Former Reserve Bank governor Bernie Fraser said yesterday there was no case for imposing a fixed term on the board's members. "If someone remains active and alert and continues to contribute in a helpful way to the governance of the bank and the country, then I think there shouldn't be any issue of whether two terms is a limit," Mr Fraser said. "I can understand the desire for new blood from time to time, but I wouldn't be making room for new blood by axing someone who has been a major contributor."

Mr Fraser said Reserve Bank governor Glenn Stevens would be expected to discuss Professor McKibbin's contribution to board debate with Mr Swan before a decision was made...Mr Fraser said Professor McKibbin's suitability for the board should not be based on his comments on government policy.

"Warwick has been an active public commentator on all sorts of economic and political issues," Mr Fraser said. "What is said in that commentary that might be critical of the government of any persuasion shouldn't be seen as contrary to his Reserve Bank board activities."

HSBC chief economist Paul Bloxham, who was a senior economist with the Reserve Bank until September last year, said Professor McKibbin was well regarded by the staff. He noted that he had international standing as an academic and also knew Reserve Bank issues intimately, having worked there himself for more than 10 years. "I think you'd be hard pressed to find someone who was as equally qualified," Mr Bloxham said.

There have been suggestions the government's climate adviser and fellow ANU academic Ross Garnaut might be chosen to replace Professor McKibbin. Managing director of funds management firm Rismark, Christopher Joye, said yesterday that the best way to strengthen the Reserve Bank board would be to appoint Professor Garnaut when former Telstra chairman Donald McGauchie's second term expired in March, while reappointing Professor McKibbin for a third term.""

See also my post below on some of the challenges facing the RBA vis-a-vis monetary policy.