Help wanted: Tough central bankers

Fri Jan 29, 2010 11:41am EST
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By Krista Hughes

DAVOS, Switzerland (Reuters) - Glenn Stevens, the governor of the Reserve Bank of Australia, is an accidental hero of the global financial crisis.

A career central banker, Stevens, 52, once described himself in a newspaper article as "not a particularly great risk-taker". On the day he was appointed to the job, August 1, 2006, the exasperated photographers crammed into his spartan office were forced to ask him to smile for the camera, according to local media reports.

"That's a bit hard. I'm a central banker," he deadpanned.

Then, on October 6 of last year, Stevens was thrust into the spotlight. Australia became the first G20 nation in the wake of the financial crisis to raise interest rates, signaling an upbeat view of future economic activity. It was not a widespread sentiment.

The surprise hike came as U.S. and euro zone policymakers were still crossing their fingers, hoping their economies had escaped recession in the third quarter. It was hailed as a vote of confidence in a still uncertain recovery, pushing gold prices to a record high and global shares up nearly 2 percent.

In the end, Australia was among the few G20 nations to sidestep a brutish recession.

"We have long argued that Australia is the canary of the global economy," RBC Capital Market senior economist Su-Lin Ong said at the time. "If the Australian economy kept singing, then it was likely the world economy would avoid falling into the abyss."

It has not fallen so far.   Continued...

<p>Glenn Stevens, governor of the Reserve Bank of Australia (RBA), gives a speech at the Australian Business Economists dinner in central Sydney December 8, 2009. REUTERS/Daniel Munoz</p>