Reserve Bank of India (RBI) Governor D Subbarao scored a ‘B’ grade in the annual Central Banker Report Card carried by the Global Finance magazine in its October issue.
Subbarao fared better than the US Federal Reserve Chairman Ben Bernanke and the People’s Bank of China (PBOC) Governor Zhou Xiaochuan, both of whom scored a ‘C’ grade.
Though the Indian economy had shown growth, inflation could be a concern, the magazine said in its assessment of Subbarao. “There are concerns that the central bank’s (RBI’s) efforts to combat the credit crunch by boosting liquidity will only add to inflationary pressures,” it said.
The survey of 31 leading central bankers in the world was topped by Jean-Claude Trichet of European Central Bank and Glenn Stevens of Australia among others.
Others who scored the ‘A’ grade were central bankers of Czech Republic, Malaysia, South Korea, Taiwan and Israel. Bernanke was upgraded to ‘C’ from ‘C-’ last year.
“It is true that the Fed responded quickly and aggressively to the worst crisis in generations. It remains to be seen, however, if it did the right thing,” the magazine said on Bernanke.
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The magazine graded central bank governors of 30 countries and the ECB on a scale of ‘A’ to ‘F’ for success in areas such as inflation control, economic growth goals, currency stability and interest rate management. ‘A’ stands for excellent performance, while ‘F’ for outright failure.
This year, a special emphasis was laid on how the central bankers led their economies through the worst financial crisis. Zhou was downgraded to ‘C’ from ‘B-’ a year ago on doubts over the effectiveness of PBOC in curbing the credit boom. Bank credit in China in the initial few months of 2009 rose almost thrice the level seen during the entire 2008.
“There is also the nagging question about the valuation of the renminbi, which, according to some economists, is undervalued by 15-25 per cent,” the magazine said.
Trichet was upgraded to ‘A’ grade from ‘C’ last year for withstanding pressure to ease the policy stance aggressively to save the European banking system.
Other central bankers who were downgraded this year include Sweden’s Riksbank Governor Stefan Ingves to ‘C-’ from ‘B’, Singapore’s Heng Swee Keat to ‘B’ from ‘A’ and South Africa’s Tito Mboweni to ‘B’ from ‘A’.