KUALA LUMPUR: Now that Tan Sri Dr Zeti Akhtar Aziz has reiterated that she will not stay on as Bank Negara Malaysia governor after her contract expires on April 1, the guessing game on who will replace her intensifies.
The rumour mill is in overdrive with an array of potential candidates.
Whoever the person is, the next governor will face a huge task, as responsibilities awaiting seem insurmountable, especially amid the current global economic uncertainties.
Once appointed to the post, the next governor would have to address the impacts of the uncertainties, such as heightened volatility in the financial markets, declining commodity prices, weakening of the ringgit and China’s economic slowdown.
The upmost challenge would be trying to figure out how to further enhance the domestic economy while, at the same time, making sure that public finance remains sustainable.
The next governor, indeed, have big shoes to fill.
Zeti is internationally recognised as one of the world’s best central bank heads, clinching the title 10 times in her 16 years serving Bank Negara.
At the third-quarter gross domestic product growth announcement in November last year, Zeti said Bank Negara already had a succession plan in place, reflecting the solidity of the central bank.
Last Wednesday, she reiterated that she was not likely to extend
her tenure and that the eventuality of someone succeeding her was a certainty.
Zeti also emphasised the importance of Bank Negara, as a solid organisation with institutional strength and resilience, to continue to enjoy its independent powers.
“I believe the country — any country — needs an organisation which is not drawn into any political developments or agenda and will remain focused on ensuring ‘econ and fin stability’ so that the policies can be directed to achieve what is in the best interest of the country.”
She said previously a few individuals had been nominated to succeed her but none was approved by the central bank’s governance committee as they were linked to other companies, thus creating conflicts of interest.
The Central Bank of Malaysia Act 2009 specifies that the governor must have a certain background and possess certain credentials.
Independent economist Lee Heng Guie said impartiality remained an important asset for a central bank governor.
“I believe that Bank Negara has put in place a strong succession plan to ensure its smooth operation while fulfilling its mandates of maintaining economic, price and financial stability.
“Besides possessing valuable experiences and credentials in the related fields of economic and financial, the governor must display a leadership quality that can ensure that the central bank functions with impartiality, continuity and competence,” he said.
He said as a custodian of the country’s monetary and financial institutions, the governor must serve with utmost integrity and inspire public confidence in her or his leadership.
“As such, the public and investors place a high premium on the governor because they hope that he or she would pursue credible policies to ensure a strong and sound financial system,” he told Business Times.
Lee added that in the appointment process, the central bank sets out qualifications that reduce risk of any political persuasion, conflicts of interest and most importantly, the candidate must not be a delegate of any special interest group.
Universiti Kebangsaan Malaysia’s Graduate School of Business Professor Datuk Dr John Antony Xavier said the governor, as a public officer, should display the highest integrity and impartiality.
“He or she should be capable of taking a long-term view of things and see the big picture of the impact of his or Bank Negara’s actions,” he said.
Despite rumours an announcement was due to be made a few months before Zeti’s term expires, there has been no official announcement made, to date.
Zeti is a trailblazer with her sound financial policies and economic enhancements that have contributed to Malaysia’s strong economic fundamentals.
The country will benefit from the policies, especially in tackling the effects of the current global economic slowdown.