• Mervyn surveys kingdom
• Bank of Japan restructuring
• Dubai deaf to criticism as top UK regulators fired
• Meeting mania
• Superdollars!
• Report says Welteke rejects fine as too high
• Woman may join Germany's 'Five Wise Men'
• Richmond Fed names Jeffrey Lacker president
• Former Bank of Korea governor Chon Chol Hwan dies

MERVYN SURVEYS KINGDOM
"I want to begin my first annual report as governor by paying tribute to my predecessor, Eddie George, under whose guidance the bank demonstrated that it had the authority, credibility and public acceptability to take on an independent monetary policy role and, through the Monetary Policy Committee, made a success of it… My task is to build on that success."

These kind words opened Mervyn King's foreward to the Bank of England's 2003 annual report. But that was about the only good thing he had to say about the management of the institution he now leads.

King goes on to explain that, having examined the bank's organization, he feels the need to give it a shake up in order to give power to "individuals rather than committees". He has launched a "fundamental review" of the Bank's strategy and objectives and created a new board to run the bank's financial stability wing to "ensure that work is focused on key risks". Not satisfied with that he is taking "steps to strengthen our project approval and mentoring processes, and our procedures for management of risk in the Bank."

Hardly a ringing endorsement of the management style of his predecessor. King underlines his break with the past by refusing to comment on the BCCI case "because it has nothing to do with the Bank's current functions". Cold comfort for those members of the ancient regime, like Sir Eddie, preparing hard for their day in court.

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BANK OF JAPAN RESTRUCTURING
The Bank of Japan's Tokyo head office is up for an overhaul as reforms affecting its organization, personal policies and salaries and due to come into effect at the start of July. The reforms, to which governor Toshihiko Fukui has been highly committed since his appointment in March 2003, aim to increase flexibility so that the bank can respond to rapid changes in the financial environment. They will be gradually extended from the head office to regional branches.

While the intended efficiency drive is commendable, the reforms do not entail a particularly minimalist streamlining - 35 of the office's 51 sections will be replaced with 98 offices, established according to function.

For an advance look at how the dynamic new reorgarnisation click the link below:

http://www.boj.or.jp/en/about/04/org0405a_f.htm

MEETING MANIA

It's meeting season for central bankers and financial regulators. If you pass secretive looking officials in London it could be one of the 45 central bank governors attending the strictly private symposium being held at the Bank of England today. Or it could be someone on their way to a meeting of the Egmont group of Financial Intelligence Units. The Egmnont group's meetings - which include law enforcement officials - are even more discreet. So mysterious, in fact, that Newsmakers is having trouble finding out the location.

Officials in France are also gearing up to hammer out resolutions to combat financial crime as the Financial Action Task Force prepares to gather in Paris next week. At the close of this meeting the FATF will publish its 15th Annual Report outlining the organisation's campaign against money laundering and the results of its evaluations of the anti-money laundering systems of Argentina, Brazil, Mexico and Saudi Arabia. The world's central bank governors, meanwhile, travel from Threadneedle Street to Basel to debate the fine art of balancing the worlds bank balances at the 74th Annual General Meeting of the BIS which kicks off tomorrow. This years highpoint is expected to be the signing of a new capital accord ("Basel II"). Despite the glacial speed of its negotiation (the committee started work over six years ago), its completion is a big feather in the cap of the BIS bureaucrats (and their chairman, Jaime Caruana, governor of the central bank of Spain).

Quite who manages the world economy during this protracted talk-fest is not clear.

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SUPERDOLLAR!

A BBC documentary has alleged that millions of dollars changing hands around the world have come from top quality printing presses in North Korea, that churn out forgeries under the supervision of the government, almost indistinguishable from the real thing. No cost has been spared in purchasing the highly sophisticated Intaglio printing presses, similar to those used in the US, to produce the notes. And the investment seems to have paid off - even professionals, says the programme, are flummoxed by the apparent authenticity of the so-called "Superdollars"

Politics is never far from economics in communist North Korea, and the Superdollars have allegedly been flowing into the coffers of paramilitary communist organizations such as the official IRA and the KGB since the 1980s, claims Panorama, the British documentary. The programme estimates the Fed has already found $30m of Superdollars to date.

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REPORT SAYS WELTEKE REJECTS FINE AS TOO HIGH
The saga of Ernst Welteke continues. Welteke, who resigned as governor of Germany's Bundesbank after accepting hospitality, has refused to pay €50,000 to end an enquiry by the Frankfurt public prosecutor. His lawyer, Rainer Hamm, claimed "Such a sum is much too high and is therefore not an option."

``We will try to convince the public prosecutor that the payment of the hotel costs is not a criminal offence,'' Welt am Sonntag, a German daily, quoted Hamm as saying.

Should Welteke fail to reach an agreement with the prosecutor, the investigation may be extended to include an invitation by carmaker Bayerische Motoren Werke AG for Welteke to attend a Monaco Grand Prix.

Newsmakers wonders whether the trial has got a lot of other governors looking nervously though their receipts, or rather lack of them.

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WOMAN MAY JOIN GERMANY'S 'FIVE WISE MEN'
The "Five Wise Men", a panel of independent economic advisors at the heart of German economic policy, looks set for a demographic shake up with the entry of a wise woman for the first time. Beatrice Weder di Mauro looks set to fill the position left vacant by Axel Weber, who left to become governor of the Bundesbank in the wake of the Welteke scandal.

Weder has taught economic policy and international economics at the University of Mainz since April 2001 and has focused on capital-market themes. She has conducted research for the International Monetary Fund, worked as an adviser to the Swiss government and contributed to publications including the Journal of International Economics.

Council member Bert Ruerup is reported as saying that Chancellor Gerhard Schroeder ``got what he wanted with the nomination of a woman.''

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RICHMOND FED NAMES JEFFREY LACKER PRESIDENT
Jeffrey M. Lacker was appointed on 17 June the new president of the Federal Reserve Bank of Richmond, effective August 1, 2004. He succeeds J. Alfred Broaddus, Jr., who announced his intention to retire back in November. Lacker is currently senior vice president and director of research at the Federal Reserve Bank of Richmond.

Jeff Lacker, 48, is a graduate of Franklin and Marshall College and received a Ph.D. in economics from the University of Wisconsin. Lacker was an assistant professor of economics at the Krannert School of Management, Purdue University, from 1984 to 1989. He joined the bank in 1989 as an economist in the banking area of the research department. Lacker was named research officer in 1994, vice president in 1996, and senior vice president and director of research in May 1999.

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FORMER BANK OF KOREA GOVERNOR CHON CHOL HWAN DIES
Chon Chol Hwan, former governor of the Bank of Korea, has died aged 65 after an illness, Bloomberg reports. Chon was chairman of the South Korean Public Fund Oversight Committee, which is in charge of the sale of government assets. He was governor of the central bank from 1998 to 2002 and was succeeded by current Governor Park Seung. Chon had run the central bank since it gained independence from the government in 1998 under conditions imposed by the International Monetary Fund in exchange for a $57 billion bailout. A graduate of the University of Manchester, Chon is survived by his wife and two sons.

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