Business | Investment
Central banks in full view
Stories about personalities in the world of business and finance and their actions and their legacy can be a riveting read. And for reporters an exciting story to cover.
- By Gaurav Ghose, Finanacial Features Editor
- Published: 23:47 March 21, 2008
Stories about personalities in the world of business and finance and their actions and their legacy can be a riveting read. And for reporters an exciting story to cover.
When the going is good, even experts can lose sight of what might go wrong, and then refrain from casting a critical eye and asking how long the good times will last. They are awestruck in the face of someone with star status.
But opinions change in evaluating a person's actions as a crisis unravels itself after he/she has left office.
Then circumstances change.
Today, as the world tries to come to terms with a global liquidity crisis, it is Alan Greenspan, and his reign as the Fed chief, which are under belated scrutiny.
Critics have emerged to attack him for being too lax on the regulatory front, as well as for excessively easy monetary policy. Past interest rates - at one per cent for something like a year in 2003-04, and failing to rise sufficiently - are coming instead under the spotlight.
Some have questioned whether Greenspan, still in the public eye on the international speechmaking circuit, is quite the greatest central banker who ever lived that some have made him out to be.
Much of what is happening today in the world of global finance, say experts, represents the fallout of his policies at the Fed.
That said, no-one at this point of time envies Ben Bernanake's role as the successor.
Firefighter
Faced with a tumultuous financial crisis, still unravelling, and which is likely to push the US economy into recession, he is having to fight a fire which threatens to engulf the US financial system - with all its implications for the rest of the world's economy.
Wall Street hangs onto every word and action, some of which have been necessarily dramatic.
Here in the UAE, the Central Bank governor's statements are closely followed with regard to the dirham's peg to the dollar and possibility of revaluation. The US's travails seem a world away. It's a very different scene in the region, with an altogether different liquidity problem. The last time we heard something seemingly radical about policy from Central Bank governor Sultan Bin Nasser Al Suwaidi was in November, when he said that there was severe social and economic pressure to drop the peg to curb soaring inflation.
Yet, a few days later, he reaffirmed the UAE's attachment to the dollar peg, a position that has remained unchanged. The decision on interest rates is not in any case completely in his hands, given the policy's determination.
So when the time comes to reflect, any evaluation with hindsight of policy during this period would necessarily be very different from that of the US.
Share this article
More from Investment
More from Business
Popular in Business
-
Budget travel
Airlines in the region
Take a pictorial look at some of the budget airlines in GCC
Business Editor's choice
-
New law to protect investor rights
Dubai land department is studying legislation to protect property purchasers
-
Global Village
Revamped layout featuring four cultures to greet visitors this season
-
Cloud computing is here to stay
Managing security effectively is critical when sharing data over the internet
