Excerpt:
"With the exit of Dr Zeti Akhtar Aziz, the Governor of Bank Negara, Penang Monthly considers the issue of central bank governance.
As the outstanding leadership of Dr Zeti Akhtar Aziz as Governor of Bank Negara Malaysia (BNM) draws to a close, this article aims to shed more light on global best practices for choosing a central bank governor and provides profiles of central bank governors worldwide."
"A critical aspect of central banks’ autonomy pertains to the appointments procedure (Figure 2), their terms of office and the procedures for their dismissal. The understanding is that senior officials should have tenure and should be protected against arbitrary dismissal. The power to appoint central bank governors rests mainly with the Head of State (60%). This is the case in Malaysia, where the Yang di-Pertuan Agong appoints the Governor[6]. However, on the way, the BNM Governance Committee prepares a shortlist of candidates and submits it to the Government, which in turn proposes candidates to the King.
Having a number of institutions involved in the appointment process (Figure 3), i.e. a multifaceted appointment process which involves advice, recommendation or consent by another body, may mute the influence of any single political party in the selection of a governor.
In order to ensure tenure, the length of mandates and the conditions for reappointment are specified. As Table 1 shows, the most common length of term is five to six years with the possibility of being reappointed. This was the case in BNM[7], where Zeti was in office for three terms. The Bank Negara Act 2009 provides for the appointment of the governor in line with best international practices without being specific in detail.The remuneration of central bank governors has to be approved by the supervisory board as well as outside parties, such as the government and/or the parliament."
More:
http://penangmonthly.com/things-to-consider-when-choosing-a-governor-for-bank-negara-malaysia/
Link
"With the exit of Dr Zeti Akhtar Aziz, the Governor of Bank Negara, Penang Monthly considers the issue of central bank governance.
As the outstanding leadership of Dr Zeti Akhtar Aziz as Governor of Bank Negara Malaysia (BNM) draws to a close, this article aims to shed more light on global best practices for choosing a central bank governor and provides profiles of central bank governors worldwide."
"A critical aspect of central banks’ autonomy pertains to the appointments procedure (Figure 2), their terms of office and the procedures for their dismissal. The understanding is that senior officials should have tenure and should be protected against arbitrary dismissal. The power to appoint central bank governors rests mainly with the Head of State (60%). This is the case in Malaysia, where the Yang di-Pertuan Agong appoints the Governor[6]. However, on the way, the BNM Governance Committee prepares a shortlist of candidates and submits it to the Government, which in turn proposes candidates to the King.
Having a number of institutions involved in the appointment process (Figure 3), i.e. a multifaceted appointment process which involves advice, recommendation or consent by another body, may mute the influence of any single political party in the selection of a governor.
In order to ensure tenure, the length of mandates and the conditions for reappointment are specified. As Table 1 shows, the most common length of term is five to six years with the possibility of being reappointed. This was the case in BNM[7], where Zeti was in office for three terms. The Bank Negara Act 2009 provides for the appointment of the governor in line with best international practices without being specific in detail.The remuneration of central bank governors has to be approved by the supervisory board as well as outside parties, such as the government and/or the parliament."
More:
http://penangmonthly.com/things-to-consider-when-choosing-a-governor-for-bank-negara-malaysia/
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