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 She became vice-chair of the Fed in 2010 and has been the frontrunner for the chairmanship since Larry Summers rescinded his nomination.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