News This Issue:

• Large Relief
• Reddy's Replacement
• After Crockett
• Argentina's Merry-Go-Round
• Cambridge Punters…
• …And Jackson Holers
• Bank Burglar Bagged
• Marchenko "Not Going Anywhere"
• Dookeran Gets Political
• Contentious Coins
• Disintegrating Notes

Large Relief
And not before time too! For a while it seemed like the Treasury had forgotten about its responsibilities to appoint a successor to David Clementi, the now ex-deputy governor of the Bank of England. But all's well, Sir Andrew Large has been selected to take his place, and a fine job he will surely do too. He certainly has many of the right credentials: now 60, he has been deputy chairman of Barclays since 1998, before which he was chairman of the Securities and Investments Board (the predecessor of the Financial Services Authority) for six years, already with a good twenty years in investment banking under his belt. Nice to have a City chap batting for the Bank, even if his economics may be a bit rusty he read economics at Cambridge in the 1960s when it was still dominated by the Keynesians.

Have the Bank and Sir Andrew been miffed by the inept manner of his appointment? We all know our Chancellor by now. He's thinking: "If I have to wait so long to get Tony Blair out of the way and be prime minister, why shouldn't I make others wait for their moment of glory?"

Sir Howard Davies, head of the FSA, put it beautifully: "As I am leaving in January 2004 I expect my successor will be announced some time in February 2005." With remarks like that, I suppose we can safely assume that Davies is no longer a candidate for governor of the Bank, the vacancy for which is coming up next summer which narrows the field down to two. There is Mervyn King, the other deputy governor, and another whose name temporarily escapes me…

For Large the new job actually represents a pay rise. At Barclays, on a three-day week, he was palmed off with just £175,000, while Clementi was getting £208,000 when he left the Bank. But that can't be his motive, surely. One euro-sceptic made a particularly cruel remark on learning of the appointment: "Finally, a half-convincing argument for joining the single currency. We've run out of people to run British monetary policy."

Newsmakers looks forward to Large proving such sniping wrong. There is one comfort: Sir Andrew didn't accept the job in order to get the traditional knighthood. Since Englishmen at that level only take on burdensome and dangerous roles to get a "gong" (honour from the Queen), Newsmakers wonders what makes him tick…

After Crockett
Since Andrew Crockett, general manager of the BIS, announced he would be saying his goodbyes to the BIS next March, the pressure is on to go through the motions of seeking a suitable replacement. The board of governors has now named a committee which will dedicate itself to this exacting task, to be chaired by Nout Wellink of the Netherlands Bank. Wellink played down the challenges involved: "We are simply looking for the best candidate in a broad field." But quite apart from filling the shoes of the man who is credited with transforming the BIS from a euro-centric clique to one with claims to have a global reach, the criteria stipulated are enough to deter any other than the most dedicated applicants.

The right candidate will have "a broad profile of the qualities needed for success in a post that calls on diplomatic as well as technical skills" and "a track record of proven independence and personal integrity". He or she will also have "outstanding management skills" and "high stature in the international financial community" as well as "a strong background in dealing with issues faced by the central bank community". Plenty of those floating around I'm sure.

The problem for would-be candidates is this: how to find out whether the successor has already been chosen in secret. If you are a well-known central banker and you fancy your chances, do you just send in your CV to Wellink? If you then find out the successor has already been selected, and you get a polite letter saying your candidacy has been unsuccessful, you lose face. You feel put out. Yet for all the BIS's efforts to prove it has moved into the 21st century, they will have their work cut out persuading people that they don't have a successor in mind, even if nothing is in writing. Newsmakers would favour a third world candidate like, say, Fraga of Brazil or Ortiz of Mexico, but with a search committee drawn entirely from the G10, that is unlikely.

Advice to candidates: try calling privately one of the other members, Antonio Fazio, Roger W Ferguson, Jean-Pierre Roth, Jean-Claude Trichet or Yutaka Yamaguchi. If they take your call, you may be in with a chance. http://www.bis.org/press/p020910.htm

Argentina's Merry-Go-Round
People must be getting quite fed up with trying to keep up with the state of play of the merry-go-round that is the governorship of Argentina's central bank. In case you were getting confused, Aldo Pignanelli is currently the big man at the central bank, having replaced Mario Blejer who resigned in indignation in June. But Pignanelli is not faring much better. It's the same old story: disagreements over how to run monetary policy and lift the partial deposit freeze. At last count, Argentina's economy minister Lavagna was keen to swap Pignanelli with a rather more docile governor of his own choice.

He recently asked Amadeo Vazquez if he wouldn't mind running the central bank, as he is currently in charge of BBVA Banco Frances and is intimate with some of the largest companies in Argentina. Lavagna thinks that Pignanelli doesn't care enough about the productive sector, and is only watching out for the banks, but he hopes Vazquez would do things differently. Let's hope Pignanelli is capable of keeping his end up he seems to need encouragement from President Duhalde not to resign as his resignation would only damage the government's credibility and make the IMF even more reluctant to lend the money that Argentina so desperately wants.

Cambridge Punters…
While all the publicity focussed on the recent central bank meeting at Jackson Hole, Wyoming, in fact only a handful of foreign central bankers attended, whereas the other conference taking place at the same time, at Cambridge, UK, attracted 150 central bankers (half of them female) including governors, from 80 countries. This was the annual residential Central Banking Training Course/Seminar Series run for the past five years by Central Banking Publications. Seven seminars were organised over a two-week period in the beautiful setting of Christ's College. The sun shone, the birds twittered and the 500-year old college looked its best for the occasion, with immaculate courts and their green English lawns.

One highlight of the serious part of the meeting was the presentation by Charles Goodhart, who also served as general course adviser. Charles had the delegates on the edge of their seats for his four-hour marathon interactive group therapy session on "Performance Measurement" for central bankers.

On the lighter side was the spontaneous punting regatta organised by Newsmakers, where delegates were wafted in punts along the "Backs", viewing the great colleges glide by: St John's, Trinity, King's…

Bank Burglar Bagged
The game is up for the double-crossing security guard who facilitated the pillaging of the West African central bank's vaults. Sia Popo Prosper assisted in the snatching of some $3 million from the Ivory Coast branch of the BCEAO, a lightening operation which took less than 13 minutes. He was apprehended in Ouagadougou in Burkina Faso earlier this week after the freebooters fled the country with their ill-gotten gains. But questioning has yielded little of any use he insists he was the only insider involved and resolutely refuses to betray where they stashed the cash.

Readers may be interested to hear that this is not the first time that the security officer in the Ivory Coast's central bank has been up to no good. In another inspired creation of those Nigerian "419" scamsters (see previous issue of Newsmakers), a certain Ibrahim Musa claims to have been the chief security officer of the "Central Bank of the Ivory Coast" compelled also to leave the country, but this time because of the military coup in 1999. He managed to salvage no less than $15m (Prosper's loot seems meagre by comparison) in a couple of boxes which he declared as "photographic material to avoid the Security Company from raising eyebrows and bad intention over the boxes." He is offering 20% if you can help him shift it to a safe place. See for yourself: http://members.tripod.com/aspaaus/ibrahimmusa.htm

Contentious Coins
Just when the ECB might have been patting itself on the back for so flawlessly executing the introduction of notes and coins, this had to go and happen. A gang of pesky scientists decided to throw a tantrum about certain rather unfortunate properties of the euro coins. It has been discovered that they release up to 320 times the amount of nickel that the EU's very own regulations warn cause nasty rashes on people who are allergic to nickel (which is around one in ten people). Actually the euro coins contain less nickel than many of the other coins previously issued by the national central banks the problem lies in their particular makeup.

The handsome two-tone composition of the one and two euro coins is such that when in contact with human sweat, they become like a tiny little battery, as the two alloys react to trigger a current of about 40 milliwatts to pulse through the coins, releasing nickel ions onto skin which causes itching, reddening and blistering. This should not be a problem for most, but those who handle the coins a lot, like cashiers or bus conductors, might have cause for concern. This is not news the ECB will be itching to hear, but if it doesn't do anything about it, it may prove allergic to the consequences. (Click here for the original article exposing this problem: http://www.nature.com/nsu/020909/020909-9.html)

This glitch in the euro coins has not deterred enthusiasts in Britain from snapping up a limited prototype series of British euro coins although it may have to do with the fact they are made of gold and silver, not base alloys. The coins were minted to persuade stubborn Brits that their own beloved coins would not lose their appeal or individuality should the euro ever replace the noble pound. For more information see: http://www.lbmrc.co.uk/euro_british_coins.htm