Global Finance grades the world’s central bank governors on how well they have performed in the past year.

Author: Anita Hawser, Gordon Platt, SANTIAGO FITTIPALDI

After flooding the world with liquidity for the past decade, a growing number of central bankers in advanced economies are seeking a path back to dry land. Higher interest rates are needed to restore normalcy, in part so that rates can be lowered once again if another financial crisis hits. While few major economies exhibit exuberant growth, central bankers are a cautious lot; they like to take the punch bowl away just as the party is getting good—before it gets out of hand.

For 23 years, Global Finance has been grading central bankers on how well they do their jobs. Our ratings are largely based on inflation control, economic growth, currency stability and interest-rate management. Other factors taken into account are central bankers’ skills in supervising financial institutions and their determination to protect their independence in the face of political pressure.

In her speech at the gathering of central bankers in Jackson Hole, Wyoming, in August, Federal Reserve chair Janet Yellen discussed the financial reforms policymakers in the US and around the world have made to limit both the probability and adverse consequences of future financial crises. “The balance of research suggests that the core reforms we have put in place have substantially boosted resilience without unduly limiting credit availability or economic growth,” Yellen said. Sooner or later, she added, the system will revert to irrational exuberance and excessive leverage, but “in new ways that will require policy responses.”

In this year’s report cards, we rate the performance of 83 central bank governors. While it is too early to grade the seven rookie central bankers who were installed most recently, Global Finance assessed the remaining governors on a scale ranging from A for head of the class to F for outright failure. We have added nine countries this year: Democratic Republic of Congo, Dominican Republic, El Salvador, Honduras, Jamaica, Myanmar, Nepal, Nicaragua and Tanzania.

Emerging-market central banks may be more likely to lower rather than raise rates in the months ahead, as inflation remains subdued, according to economists at Capital Economics. In emerging Europe and Latin America, core inflation has been falling, as spare capacity in those regions’ largest economies—Russia and Brazil—has kept prices down. Inflation is likely to be at or below central bank targets in most emerging markets over the remainder of the year, Capital Economics forecasts. The firm’s aggregate measure of emerging-market inflation is at an eight-year low of 3%.

Global growth is indeed picking up, yet signs of inflation are lacking in both wages and energy prices. Asset inflation has soared, however, with a huge boost from central bank purchases of $12 trillion, mainly in government bonds, in response to the financial crisis. Unwinding these massive positions will be done gradually over time to avoid triggering market declines—such as the Taper Tantrum in the summer of 2013, after the Federal Reserve announced it would begin reducing its purchases of bonds and mortgage-backed securities.

Meanwhile, “with monetary policy globally very expansionary, regulators should be wary of rekindling the incentives that led to the [financial] crisis,” Mario Draghi, president of the European Central Bank, said at Jackson Hole. “When monetary policy is accommodative, lax regulation runs the risk of stoking financial imbalances.”

“The global recovery is firming up,” Draghi said, adding that in Europe and Japan, “the consolidation of the recovery is at an earlier stage” than in the US. He gave no indication of when the ECB would end the eurozone’s $2 trillion bond-buying program.

 

Here are the tables for Central Bank Governors for how they fared in 2017 versus 2016 by region 

 

THE AMERICAS

 

 

  Country Central Bank Governor 2017 2016

Argentina

Federico Sturzenegger

B-

B

Bolivia

Pablo Ramos Sánchez

B+

B+**

Brazil

Ilan Goldfajn

A-

Too early to say

Canada

Stephen Poloz

B+

B-

Chile

Mario Marcel

B

B**

Colombia

Juan José Echavarría

B

B+**

Costa Rica

Olivier Castro Pérez

B+

B+

Dominican Republic

Héctor Valdez Albizu

A-

N/A*

Ecuador

Verónica Artola

Too early to say

B**

El Salvador

Oscar Cabrera Melgar

B+

N/A*

Guatemala

Sergio Francisco Recinos Rivera

B

C**

Honduras

Manuel de Jesús Bautista

A

N/A*

Jamaica

Brian Wynter

B

N/A*

Mexico

Agustín Carstens

B

A-

Nicaragua

Leonardo Ovidio Reyes Ramírez

B+

N/A*

Paraguay

Carlos Fernández Valdovinos

A

A

Peru

Julio Velarde Flores

B+

A

United States

Janet Yellen

A

A-

Uruguay

Mario Bergara

B+

B+

Venezuela

Ricardo Sanguino

F

F**

 

 

EUROPE

 

 

 

Belarus

Pavel Kallaur

C

C

Bulgaria

Dimitar Radev

B

B

Czech Republic

Jiří Rusnok

C

Too early to say

Denmark

Lars Rohde

B

B+

European Union

Mario Draghi

B+

B+

Hungary

György Matolcsy

D

C

Iceland

Már Guömundsson

B

B

Norway

Øystein Olsen

B

B

Poland

Adam Glapiński

C

Too early to say

Romania

Mugur Isărescu

C

B

Russia

Elvira Nabiullina

A

A

Sweden

Stefan Ingves

B+

B

Switzerland

Thomas Jordan

B-

B

Turkey

Murat Çetinkaya

B

Too early to say

Ukraine

Yakiv Smolii (Acting)

Too early to say

B+**

UK

Mark Carney

B

A

 

ASIA-PACIFIC

 

 

Australia

Philip Lowe

A

Too early to say

Azerbaijan

Elman Rustamov

C

D

Bangladesh

Fazle Kabir

B

Too early to say

China

Zhou Xiaochuan

C+

C

Hong Kong

Norman Chan

B-

B

India

Urjit Patel

B+

Too early to say

Indonesia

Agus Martowardojo

B

B

Japan

Haruhiko Kuroda

B+

B

Kazakhstan

Daniyar Akishev

B

C

Malaysia

Muhammad Ibrahim

B+

Too early to say

Myanmar

Kyaw Kyaw Maung

C+

N/A*

Nepal

Chiranjivi Nepal

C+

N/A*

New Zealand

Grant Spencer (Acting)

Too early to say

B**

Pakistan

Tariq Bajwa

Too early to say

B**

Philippines

Nestor Espenilla Jr

Too early to say

A**

Singapore

Ravi Menon

B-

B-

South Korea

Lee Ju-yeol

B

B+

Sri Lanka

Indrajit Coomaraswamy

B+

Too early to say

Taiwan

Fai-Nan Perng

A

A

Thailand

Veerathai Santiprabhob

C+

B-

Uzbekistan

Mamarizo Nurmuratov

Too early to say

C**

Vietnam

Lê Minh Hung

B-

Too early to say

 

*CB governor was not graded in 2016 **Applied to a prior CB governor.

MIDDLE EAST & AFRICA

 

 

Algeria

Mohamed Loukal

B-

Too early to say

Angola

Valter Filipe Duarte da Silva

B-

Too early to say

Bahrain

Rasheed Mohammed Al Maraj

C

B-

Botswana

Moses Pelaelo

B+

B**

DR Congo

Deogratias Mutombo Mwana Nyembo

C-

N/A*

Egypt

Tarek Amer

B+

C

Ethiopia

Teklewold Atnafu

B

B

Ghana

Ernest Addison

Too early to say

Too early to say**

Iraq

Ali Mohsen Ismail

D

C

Israel

Karnit Flug

A

A

Jordan

Ziad Fariz

A-

A-

Kenya

Patrick Njoroge

B-

B+

Kuwait

Mohammad Yousef Al Hashel

B+

B-

Lebanon

Riad Salameh

A

A

Morocco

Abdellatif Jouahri

A

A-

Namibia

Ipumbu Wendelinus Shiimi

B-

B

Nigeria

Godwin Emefiele

D

B-

Oman

Hamood Sangour Al Zadjali

B

B

Qatar

Abdulla Bin Saoud Al Thani

B

B

Saudi Arabia

Ahmed Alkholifey

B+

Too early to say

South Africa

Lesetja Kganyago

C

B

Tanzania

Benno Ndulu

C

N/A*

Tunisia

Chédli Ayari

B

B

Uganda

Emmanuel Tumusiime-Mutebile

C+

B-

UAE

Mubarak Rashed Al Mansoori

B+

B+