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BOJ’s Fukui, Fed’s Bernanke leave summit

June 25, 2006

BASEL, Switzerland (Reuters) – The central bank chiefs of
the world’s two largest economies, the United States and Japan,
left a Bank for International Settlements summit on Sunday
without speaking to reporters.

Federal Reserve Chairman Ben Bernanke kept the practice of
his predecessor Alan Greenspan and made no comments before
leaving Basel. The Fed has a two-day rate meeting starting
Wednesday where it is widely expected to raise rates by at
least a quarter percentage point to 5.25 percent.

Bank of Japan Governor Toshihiko Fukui is usually ready to
comment at central bank gatherings here but on Saturday he
waved reporters away and on Sunday he did not use the main
hotel lobby where he usually greets journalists.

Fukui was due to fly back to Japan on Sunday, where he
faces a critical decision on when to start credit tightening
after five years of zero interest rates to combat deflation.
That pivotal moment comes when he is under intense public
scrutiny and pressure to resign over his personal investments.

Fukui’s judgment and ethical standards have been called
into question since he revealed he had invested 10 million yen
($87,000) years ago in a fund run by financier Yoshiaki
Murakami, now under arrest on suspicion of insider trading.

The central bank chiefs spent Saturday in session with
monetary officials from all over the world on the global
economy and financial markets which have been unnerved by how
much central bank tightening might be in store. Officials said
BIS hosted a dinner on Saturday evening. while on Sunday
delegates were touring the Swiss capital of Bern.

Other G7 central bankers in Basel included European Central
Bank President Jean-Claude Trichet, Bank of England Governor
Mervyn King and Bank of Canada’s David Dodge as well as China’s
central bank governor Zhou Xiaochuan.

About 275 monetary officials from over 100 countries were
gathering in the Swiss border town of Basel this week ahead of
Monday’s annual meeting of the BIS, a bank and research center
for the world’s central banks.

The BIS hosts top-level central banking forums, such as the
regular G10 meetings of major industrialized and developing
countries, the Basel Committee on bank capital accords and the
Financial Stability Forum.


Source: reuters



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