President Barack Obama’s nominee for Federal Reserve chair appeared before the Senate banking committee on Thursday. She mounted a vigorous defence of the Federal Reserve’s quantitative easing policy as she faced lawmakers in her first big test of political and communications skills.
Gina Chon and Shannon Bond reported from New York with James Politi in Washington.
Janet Yellen’s nomination for the Fed chairmanship is a significant mark in the history of female central bankery – mainly because there isn’t much of a history.
As Claire Jones, the FT’s economics reporter, points out: advanced economy central banks are severely lacking in female representation in their upper echelons.
In other markets, however, women have more of a presence in monetary policy. Outside of advanced economies, the list of women at the head of central banks is longer than the list of women on the ECB governing council (0).
Gill Marcus (Getty)
South Africa: Gill Marcus spent time in the UK as her parents were anti-apartheid activists in South Africa. She joined the ANC and worked for its department of information and publicity, then returned to South Africa after the ANC ban was lifted. She was appointed deputy minister of finance in 1996 and became deputy governor of the South African Reserve bank in 1999. After a few years working outside the central bank system, she was appointed governor in November 2009. In 2010 she said, “Developing countries are more conscious of women’s emancipation – we’ve all got better statistics in relation to gender than in the developed world.“ Read more
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Janet Yellen is soon to be the first woman to be the chair of the US Federal Reserve – the most powerful job in the world economy.
The 67-year-old was an academic for many years, and also served as chair of President Bill Clinton’s Council of Economic Advisers and president of the San Francisco Fed. She became vice-chair of the Fed in 2010 and has been the frontrunner for the chairmanship since Larry Summers rescinded his nomination.
A graduate of Brown University and Yale, she is married to the Nobel Prize-winning economist George Akerlof, and has one son.
Her track record of calling events like the housing bubble long before they occur has built her a strong fan base. We look at what’s been written about her and what that says about her likely stance as Fed chair. Read more
By David Gallerano
♦ Ben Bernanke sent “contradictory signals about how the Fed was going to assess the economy”. His is a “confused guidance”, which makes it hard to tell whether the actual policy on tapering is just a pause for the Fed or whether there needs to be clear evidence of acceleration. Michael Mackenzie says the FOMC’s delay of the taper yesterday affects Fed’s credibility.
♦ Syria’s war rages on but Damascus nightclubs remain obstinately open.
♦ The Syrian conflict is spilling over to Iraq with the city of Muqdadiya, in the Diyala Province, becoming the theatre for a “Balkans-style” ethnic conflict with Sunnis supporting the rebels and Shiites backing the Assad government.
♦ The Arabist reports the story of Mohamed Gabr, police chief of a small village in Egypt, who was brutally killed by a group of Islamists.
♦ The United Nations Economic Commission on Africa (UNECA) cancelled Morten Jerven’s presentation of his research “due to lobbying from South African Statistician General Pali Lehohla”. Jerven’s research criticizes several African Statistic institutes and has already raised protests in Zambia and South Africa. Read more
By David Gallerano
♦ Edward Luce argues that Lawrence Summers has done everyone a favour by taking himself out of the running to be the next Fed chair.
♦ Alec Russell interviews Nobel Peace laureate Desmond Tutu and asks him about God, Mandela and Syria.
♦ James Blitz retraces last week’s main events in the Syria crisis, while the Wall Street Journal reports on Barack Obama’s conduct behind the scenes of the Syria crisis.
♦ Shadi Hamid points out that Assad was rewarded rather than punished for his use of chemical weapons.
♦ The New York Times’ Laura Pappano reports on Battishug Myanganbayar, a 16 years-old genius from Ulan Bator, Mongolia. “How does a student from a country in which a third of the population is nomadic, living in round white felt tents called gers on the vast steppe, ace an MIT course even though nothing like this is typically taught in Mongolian schools?”
♦ The Hewitts, a white South African family, left behind their comfortable life and moved to 100-square-foot shack with no electricity or running water. A notable experiment for some – just “poverty pornography” for others.
♦ The Royal Academy presents an exhibition of 200 artworks from the “vast and diverse nation” of Australia. Read more
By Catherine Contiguglia
♦ The vote to determine who will lead the Fed will be “razor thin,” and there are a lot of questions about White House favourite Larry Summers’ record on regulation, which suggest that though he might embrace tough capital and liquidity requirements, he is likely to be less sympathetic towards structural proposals.
♦ The question of military intervention in Syria on the backdrop of deteriorating US-Russia relations is dominating the G20 meeting and bringing to light just how reluctant many western powers are to engage in global policing, which raises the question of who will enforce global rules.
♦ The reluctance to intervene is often blamed on the shadow of US intervention in Iraq, but some say the situation in Syria should rather be compared to the sectarian Bosnian civil war where a US-led bombing campaign was hailed as bringing peace. Regardless of the outcome of Obama’s vote on Syrian intervention in Congress, the US President will still lose – either his integrity, or his domestic authority and will alienate all his “friends and frenemies.”
♦ Top secret documents revealed by the NSA whistleblower Edward Snowden show that US and UK intelligence agencies successfully developed methods to crack encryption used to protect online privacy, compromising all internet security guarantees.
By Catherine Contiguglia
♦ Germany gets a lot of advice – good and bad – about how it should be handling the situation in Europe, the FT’s Tony Barber writes, when its greatest contribution would be to reform and modernise its own economy.
♦ Indonesia has enjoyed remarkable economic and political transformation, but the first regime change in the country’s democratic era will be the true test of the country’s resilience.
♦ Russia’s awkwardly worded ban on “propaganda of nontraditional sexual relations among minors” has sparked international condemnation, as well as crackdown within Russia on those who question it – even in jest.
♦ With Larry Summers as a top pick to replace Ben Bernanke as chairman of the US Federal Reserve, there are a lot of questions about whether his connections with Wall Street make him better informed for the position, or whether they present a conflict of interest, especially as the Fed works to complete regulatory legislation.
♦ The mother of Neil Heywood, the British businessman whose murder led to the downfall of Chinese Communist official Bo Xilai and the conviction of his wife, has broken her silence in a statement saying that Chinese officials have still given her neither a full account of the murder nor compensation, leaving Heywood’s two children without financial provision. Read more
Sandra Pianalto, who has served as president of the Federal Reserve Bank of Cleveland, announced she will be retiring early next year after being in the job for a decade.
Ms Pianalto’s departure may not mean too much for monetary policy. She is known for being a centrist, predictable official on the Federal Open Market Committee, backing the chairman’s view without offering positions that are either too dovish or too hawkish.
Ben Bernanke, Fed chairman, issued an effusive statement on Thursday: “Sandy has been a remarkable colleague who has made invaluable contributions to the Federal Reserve Bank of Cleveland, the Federal Reserve System, and the country. We will miss her thoughtful insights and leadership across a broad range of issues, including monetary policy, payments policy, and community development.” Read more
♦ Barack Obama said “you would have to slice the salami very thin” to find policy differences between Lawrence Summers and Janet Yellen, who are now in the running to chair the Federal Reserve. The FT’s Robin Harding takes a look at the salami.
♦ Russia is spending $51bn on sports facilities in Sochi for the 2013 Winter Olympics, but developers fear the only winners will be friends of the Kremlin.
♦ A Nazi gaffe by Taro Aso, Shinzo Abe’s deputy premier and finance minister, is a reminder that the cultural conservatives, who dominate the ruling Liberal Democratic party, have not abandoned their revisionist dream.
♦ Tendai Biti, Zimbabwe’s finance minister, tries to find out where the busloads of voters at Mount Pleasant have come from, but the bus driver is unable to tell him. Read more
By Catherine Contiguglia
♦ The deal reached between China and the European Union on solar panel dumping may have stopped a potential trade war, but for EU Trade Commissioner Karel de Gucht, it was one more incident where his free trade crusade was dampened by the fragmented bloc he represents.
♦ Chinese telecommunications giant Huawei is funnelling billions of dollars into building the backbone of necessary communications networks throughout Africa, but has some worried that its domination of the sector creates the potential for widespread espionage.
♦ Despite multiple innovations in male contraceptives, progress towards their approval for widespread use has stagnated due to difficult barriers, particularly the lack of incentive for pharmaceutical companies to invest in a product with so many cultural and societal implications.
♦ Larry Summers should go ahead and book his summer vacation, John Cassidy writes, arguing that despite White House support, Summers has not made a great enough effort to appease Obama’s supporters by distancing himself from financial deregulation.
♦ Bradley Manning has been called many things, but a look at his background shows a conflicted young man struggling with his gender identity and personal values as a soldier in the U.S. Army. Read more
♦ China’s growth still contributes more to global demand than that of any other economy The FT looks at how rebalancing will generate winners and losers in different sectors.
♦ Turkey’s decision to raise its overnight lending rate for the first time in nearly two years underscores the dilemma facing developing economies as the end to US monetary easing draws near: focus on inflation or growth?
♦ Inflation has defied all predictions in the US during the past five years and it is making life complicated for the Federal Reserve.
♦ Haïdara Aïssata Cissé, the only woman standing for president in Mali’s upcoming elections, is an outsider, but she has improved her chances by going on walkabouts.
♦ Shaun Walker at Foreign Policy thinks Russian President Vladimir Putin should be worried about Alexei Navalny, especially as people start to compare him to Mandela and Lenin. Read more
Ben Bernanke makes what is likely to be his final appearance before Congress this week. The Federal Reserve chief repeats the central bank’s intention to slow its $85bn a month in asset purchases later this year if the economy stays strong, but says that would not mean a weakening of Fed support for the US economy.
By James Politi in Washington. All times are BST
♦ The Egyptian military reasserted its privileged political position by removing Mohamed Morsi from power. Troops surrounded the state broadcasting headquarters and General Abdel Fattah al-Sisi, the army chief of staff, delivered a televised speech announcing the takeover. Morsi’s authoritarian governing style exacerbated the huge challenges Egypt already faced – including a moribund economy and intense political polarisation, reports the FT’s Borzou Daragahi. David Gardner says that Morsi’s government, the liberals and Mubarak’s “deep state” are just as much to blame for Egypt’s stormy state of affairs as the generals.
♦ The Indian newspaper Patrika has achieved success through itsreputation for credibility – it doesn’t take political bribes, which is increasingly common among other Indian newspapers – and for public interest advocacy – it focuses on hyperlocal coverage.
♦ Lithuania’s president, Dalia Grybauskaite, has backed a deal to break up the Russian export monopoly that supplies gas to Lithuania by anchoring a ship off of a small nearby island to process deliveries of liquefied natural gas for homes and businesses.
♦ Le Monde reports that France has a “big brother” similar to the American Prism system that systematically gathers huge amounts of information on internet and phone activity.
♦ The FT’s Chris Giles argues that Carney’s “forward guidance” plan for the BoE may be too risky, even though it is based on a strategy used by other central banks including the US Federal Reserve and Bank of Japan. Read more
♦ Mr Bernanke scared markets after announcing Wednesday that the Federal Reserve will take a more heavy-handed role in the US economy with an “ambitious timetable” of quantitative easing. The announcement fueled a sell-off in equities, bonds and commodities causing world-wide financial turbulence and hitting emerging markets the hardest. People are questioning his earlier optimism in the US economy, the FT reports.
♦ Ashin Wirathu, leader of a radical Buddhist group in Myanmar, has launched a campaign against the country’s Muslim minority, according to the New York Times.
♦ Manhattan-based analysts at United Against Iran, a “privately funded advocacy group,” are trying to keep Iranian merchant ships from breaking economic and trade sanctions via satellite transmissions, navigational data and computer algorithms.
♦ The FT’s Phillip Stephens finds the election of Iranian president Mr. Rohani will likely not stop the country’s development of a nuclear weapon.
♦ China’s central bank has refused to ease the country’s credit crunch by injecting extra cash into the market, which has led to suspicions that the government is to blame.
♦ Actor James Gandolfini died Wednesday, having achieved recognition late in life for his lively characterization of Tony Soprano in the hit television series. Read more
♦ While most in Turkey acknowledge that every Turkish ruling class has sought to put its stamp on Istanbul, there is a growing sense that none has done so as insistently as the current government. Philip Stephens thinks Mr Erdogan’s heavy-handed response has only proved the protesters right. However, the protesters themselves have been let down on all sides, says Dani Rodrik: “Sadly, there is no organised political movement that can give voice and representation to the protesters that have made their point so loudly and clearly in recent days.”
♦ As Bradley Manning’s trial continues, he has a strong network of supporters behind him – more than 20,000 people have raised $1.25m for his defence.
♦ When Ben Bernanke spoke to the graduating class at Princeton this year, he seemed to confirm his intention to retire. John Cassidy considers why he would do so despite being in good health and good standing.
♦ US infantry are training Afghan troops to take over Afghanistan’s Wardak province, while trying to protect Highway 1, the lifeline that runs between Wardak and Kabul and, ultimately, their exit route out of the country.
♦ Jonah Blank explains how the US military will have to start negotiating like the Pashtuns: “A Pashtun proverb states: ‘A man with the power to fight doesn’t need to bargain.’ For more than a decade, power and money have shielded America from the necessity of negotiation. That luxury is over.” Read more
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