• Gerashchenko hopes dashed
• Kazakhstan appoints new central bank chief
• Wim fined
• Trichet nose his skiing
• Honour for Macfarlane
• Fazio denies responsibility
• Fazio could face job loss in shake-up
• Spain has 'very good' candidates to replace Solans
• Musical Argentina
• Fraser frowns
• Banking reform in China - a new offensive
• Norges Bank in gold sale
• Bank of Israel ranks no.1 in pay

GERASHCHENKO HOPES DASHED

Viktor Gerashchenko, former governor of the Russian central bank, has failed to get permission to run for president in the forthcoming elections by the Central Electoral Commission (CEC). Candidates not endorsed by parties with over 5% of the seats in the state duma are required to collect two million signatures to support their candidacy. Gerashchenko believed that as he was nominated as the official candidate of the Rodina, or Motherland Bloc, he would not need to compile the signatures. However, Gerashchenko was formally nominated as a candidate by the Party of the Russian Regions, a collective member of the Motherland bloc but not the Motherland bloc itself. As a result he is not officially nominated by a party with over 5% in the state duma and neither does he have two million signatures to support him. Consequently he has been denied registration. It has since been announced that the Russian Supreme Council will examine a complaint from Gerashchenko, who has challenged the actions of the CEC.

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KAZAKHSTAN APPOINTS NEW CENTRAL BANK CHIEF

Kazakhstan's parliament on Monday 26 January approved Anvar Saidenov, 43, as the new head of the former Soviet Republic's central bank. Saidenov, a British-trained economist, had been nominated to the post by President Nursultan Nazarbayev, the parliament's press service said. He had been deputy head of the bank since 2002. Previously, Saidenov headed a state investment agency and he also held the post of deputy finance minister from 1999 to 2000. Saidenov replaces Grigorii Marchenko, who earlier this month was named first deputy prime minister. Kazakhstan has one of the fastest growing economies in the former Soviet Union, and attracts the largest share of foreign investment -- mostly in the energy sector for projects on its Caspian Sea shore.

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WIM FINED

Wim Duisenberg, former president of the ECB, had been fined EUR300 for drink driving after being breathalysed before Christmas. Duisenberg, 68, who retired as president last November to make way for Jean-Claude Trichet of France, was found to be over the legal alcohol limit after taking a random test on 18 December in Amsterdam. A prosecution spokesman said "He paid the fine and that brings an end to this case".

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TRICHET NOSE HIS SKIING

Attending a summit in London last week ECB boss Jean-Claude Trichet stood out from the crowd with what was described as a large plaster on his nose. The group included Gordon Brown, UK chancellor, the Spanish Economy Minister Rodrigo Rato, Germany's Hans Eichel, Ireland's Charlie McCreevy and the Netherlands' Gerrit Zalm. Trichet apparently attributed the large plaster across the bridge of his nose to a Davos-related skiing sunburn injury.

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HONOUR FOR MACFARLANE

Ian Macfarlane, governor of the Reserve Bank of Australia has been awarded Australia's highest honour in a list published each year on Australia Day. Macfarlane, 57, was given the Companion in the General Division of the Order of Australia (AC). He was honoured "for service to the stabilisation of the Australian financial system, to central banking, and to the operation of monetary and economic policy in both domestic and international spheres". He has been chief of Australia's central bank since September, 1996 and was re-appointed to serve another three-year term in July.

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FAZIO DENIES RESPONSIBILITY

The governor of the Bank of Italy on Tuesday 27 January tackled his critics who say he failed to protect investors from the Parmalat scandal, claiming that banks had shown a "serious error of judgement" in their dealings with the food company. Antonio Fazio told a parliamentary hearing on Parmalat's multi-billion-euro accounting scandal that it had been impossible to follow all of the group's activities given its extensive dealings with foreign banks. The governor has faced the stiffest criticism of his decade-long term from supporters of Economy Minister Giulio Tremonti, who say the central bank failed in its duty to oversee the sale of corporate bonds ahead of Parmalat's slide into insolvency. Fazio told the hearing that Parmalat's near-collapse was the result of criminal activity within the dairy company. The way the banks advised families on their investments "probably required a higher degree to professionalism." "On more than one occasion I asked the banks to offer products with easy-to-understand characteristics," he said. The content of the report - even the report itself - appears to be beyond the ken of the encyclopaedic Tom Dawson, the Funds's chief communications officer, "I would have to--I was not aware of that report. I think I would have to check to see what document was referred to," he said when asked about this at a pres conference.

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FAZIO COULD FACE JOB LOSS IN SHAKE-UP

The Italian Government is apparently seeking to vary the appointment terms of the Governor of the Bank of Italy, currently Antonio Fazio, in a move that would force him to step down. Giulio Tremonti, the Italian Economy Minister, one of the ministers keenest to force through the change, was reported as wanting to block the unlimited tenure awarded to the Governor and replace it with a fixed-term contract. If a new law is passed to this effect, Antonio Fazio, the present Governor, could be asked to make way for a new Governor under the new rules. Currently Italy is the only EU country in which the head of the central bank serves for an indefinite period. Signor Tremonti's move was viewed by many as an attempt to force Signor Fazio to resign as a scapegoat over the lack of financial controls which led to the collapse of Parmalat.

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SPAIN HAS 'VERY GOOD' CANDIDATES TO REPLACE SOLANS

Spain can offer "very good candidates" to replace European Central Bank executive board member Eugenio Domingo Solans when his mandate ends on May 31, said Economy Minister Rodrigo Rato last week. Rato spoke after a meeting with ECB president Jean-Claude Trichet at which future executive board changes were discussed. "We spoke about changes on the ECB's executive board which will take place in the next few years, but no particular people were discussed," Rato told reporters later. Spain has "very good candidates, with wide experience and are well enough known for this post", he said. German daily Boersen-Zeitung reported that Belgian National Bank board member Peter Praet could be named as Solans' replacement and the Irish parliament discussed putting forward a candidate last week with a Minister saying the idea was "under consideration".

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MUSICAL ARGENTINA

The central bank of Argentina has introduced a novel feature by offering people the chance to listen to music while browsing its revamped website. Designers of the central bank's new homepage are trying to lure people by offering them the chance to listen to one of 10 tunes on a virtual jukebox. This month's selection includes Argentine rock, jazz and, of course, a little tango. Enjoy their music while you visit the site.

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FRASER FROWNS

Bernie Fraser, the former governor of the Reserve Bank of Australia, has taken a swipe at executive pay levels. Mr Fraser, who headed the RBA between 1989 and 1996, is chairman of superannuation funds bank Members Equity (ME). He said chief executives were being paid "scandalous" salaries while customer service was being downgraded. He said there was a belief that banks cannot be customer orientated while at the same time remaining profitable. "This is the sort of one dimensional way of thinking quite prevalent in the market place and a justification for a lot of excesses in the market - the scandalous, in my view, high remuneration packages and the downgrading of customer service," Mr Fraser said.

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BANKING REFORM IN CHINA - A NEW OFFENSIVE

Governor of the People's Bank of China, Zhou Xiaochuan will be attending a meeting that will take place next in Beijing next month, bringing together top finance officials from around China to discuss ways of keeping up the pace of banking reform. The government recently injected $86 billion in cash and stock to bailout two of its state lenders, the Bank of China and the China Construction Bank. This has been toted just the start of an aggressive reform of the banking sector. Amongst changes are reforms in the state banks, instilling a better awareness of credit risk, inviting foreign investment to take stakes in state banks and propping up the ailing stock market.

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NORGES BANK IN GOLD SALE

Norges Bank has sold 16 tonnes of gold bars in January and is planning to sell the remainder of the Central Bank's holdings of gold bars at a later time. Excluded from the sale are seven gold bars that have been used for exhibition purposes and a large number of gold coins that were transported to England when Norway was attacked in 1940. Norges Bank and the University of Oslo are discussing whether the gold coins can be put on public exhibition. The background to the sale is that gold only accounted for just over one per cent of the Bank's international reserves, and thus contributed little towards diversifying the risk associated with the reserves. The bank said that return on gold had historically been low. At end-2003, Norges Bank's gold reserves consisted of about 37 tonnes of gold, made up of 3½ tonnes of coins and 33½ tonnes of gold bars.

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BANK OF ISRAEL RANKS NO.1 IN PAY INCREASES

For the fourth year in a row the Bank of Israel topped a list of government bodies with overpaid employees, according to the Finance Ministry's Wage Report for 2002. Thirty-four of the bank's 800 staff received raises of 7.5 percent or more in 2002, earning the Bank the distinction of violating the civil service codes, which state that government employees may not get raises exceeding 5 percent in any year. In 2001, "only" 27 central bank employees received excessive salaries. The treasury and the Bank of Israel currently are embroiled in a highly publicized battle over wages. The treasury's wage director, Yuval Rachlevsky, has demanded that the central bank cut salaries, and has also instructed bank management to cancel certain traditional bonuses and increments. According to the wage report, 115 of the central bank's 800 employees average NIS 41,300 a month, which costs the taxpayer an average of NIS 54,900 per month, or NIS 659,000 a year. The average monthly wage at the Bank in 2002 was NIS 21,100, 1.9 percent higher than the previous year despite the recession.

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