Japan Faces Credit Crisis With No Central Bank Governor

Political standoff leaves BoJ top job vacant
By Jason Farago,  Newser Staff
Posted Mar 21, 2008 9:58 AM CDT
Japan Faces Credit Crisis With No Central Bank Governor
Japanese Prime Minister Yasuo Fukuda prior to the vote for the nomination of former Finance Ministry bureaucrat Koji Tanami as the governor of Bank of Japan, Wednesday, March 19, 2008.   (AP Photo/Katsumi Kasahara)

When markets are in chaos and currencies are fluctuating wildly, central bankers jump in to try to provide stability, as Ben Bernanke has done at the Fed. But in Tokyo a political standoff has left the Bank of Japan without a leader at the worst possible moment, reports the AFP. If MPs can't agree on a BoJ governor soon, the world's second-largest economy could face a serious crisis.

The previous central banker's term expired on Wednesday, but opposition politicians blocked the prime minister's nominee because of his previous roles in the finance ministry. Now the top job is vacant, and wrangling in parliament might mean that the Bank of Japan will be leaderless until April. Media in Japan are aghast at the delay: the Asahi Shimbun called the deadlock "an unprecedented, abnormal situation." (Read more Bank of Japan stories.)

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