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Japan is left without a head of the Central

March 20 2008

For the first time in postwar history, Japan was left without a central bank head of the country.

Five-year term of office of the former head of Toshihiko Fukui expired at midnight. The Cabinet has been trying to avoid this situation and suggested that two consecutive nominations for this important post. However, they were flatly rejected by the upper house of parliament, controlled by the opposition bloc led by the Democratic Party. As a result, the main lever of macroeconomic policy the second largest business powers in the world after the United States was left without a full manual.

The vacuum undermines the position of the Japanese central bank at a time when global markets are experiencing turmoil in connection with the mortgage crisis in the United States, as well as soaring oil prices. Simultaneously, the situation is adversely affecting the ranking of the government and an effort on the international prestige of Japan, who this year chairs the summit of eight leading countries of the world.

Until this year, the process of changing the leaders of Japan, Bank never gave a failure. Each time they were approved by both Houses of Parliament without any delay. However, the results of the elections last summer, the political opposition failed to get majority seats in the upper house of the legislature. Together with the parliamentary seats unit was able to prevent the adoption of decisions initiated by the ruling coalition - the Liberal Democratic Party and Komeito. Using this positional advantage, the Democrats and their allies, rejected the candidacy of Vice-President of the Bank of Japan Toshiro Muto, a day before and the head of the Japan Bank for International Cooperation Koji Tanami. Both men previously worked in Ministry of Finance and the opposition felt that it would not allow them to be necessary as independent from the cabinet.

In accordance with the legal procedure the Government must continue to look for and propose new candidates for the post of head of the central bank. Until then, until approved by all political forces are organized candidate, acting head of the bank assigned to one of the managing directors, which is responsible for monetary policy.


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