Salient to Investors:
William Pesek writes:
Asians Indonesians, Malaysians, South Koreans and Thais have not gotten over Larry Summers’ role in forcing austerity measures on governments in the late 1990s. Asians were puzzled by the 1999 Time magazine cover heralding Summers, Greenspan and Rubin as “The Committee to Save the World” for their free-market solutions to Asia’s financial meltdown, which was made worse by the trio’s ill-conceived and overbearing remedies.
Many in Asia favor Janet Yellen over Larry Summers as the next Fed chairman. Jose Camacho, the Philippines’ former finance secretary prefers Yellen.
Bank of Korea Governor Kim Choong Soo fears a bond-market rout like that in 1994 triggered by Greenspan’s sudden increases in interest rates.
Charlie Lay of Commerzbank prefers Yellen because Asia suffered when the US went into recession, and faces a new set of challenges when the US is recovering.
Even detractors admit Summers is a brilliant economist and thinker. Liu Li-Gang at Australia & NZ Banking says few financial experts have more experience dealing with crises of all shapes and sizes.
The Fed is now the world’s central bank. Asian investors care more about what happens in Washington than at their local monetary authorities. Asia is becoming the crucial market for US goods and services. Asia is now America’s financier.
Asian policy makers see Yellen as less beholden to Wall Street than Summers. Tetsuya Inoue at Nomura Research Institute says Yellen could manage the financial stability role skillfully.
Hans Goetti at Finaport Investment Intelligence said Yellen’s CV makes her the more suitable candidate with 13 years of experience in monetary policy, versus zero for Summers.
Read the full article at http://www.bloomberg.com/news/2013-08-05/who-does-america-s-banker-wants-as-fed-chairman-.html
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