The succession

THERE is always speculation in banking and financial circles over who will eventually become the next central bank chief. So it is in Malaysia, where, as governor Tan Sri Dr Zeti Akhtar Aziz’s tenure comes to an end, there has been a lot of interest over who will succeed her.

This time around, interest is not just confined to bankers as the wider public would also like to know who will eventually helm Bank Negara.

Four names have emerged as possible candidates, with the central bank’s most senior deputy governor, Datuk Muhammad Ibrahim, a career central banker, said to be the internal candidate of choice.

Besides him, the names of three others have been speculated as possible successors – the Minister-in-charge of economic planning in the Prime Minister’s Department Datuk Seri Abdul Wahid Omar, Malaysian ambassador to the United States Datuk Awang Adek Hussin, and the secretary-general of the Treasury at the Finance Ministry Tan Sri Mohd Irwan Serigar Abdullah.

The erosion of trust in public institutions stemming from issues related to 1Malaysia Development Bhd (1MDB) has made the matter of her successor more urgent since part of Bank Negara’s responsibility is to safeguard financial stability as clearly stated in part six, chapter one of the Central Bank of Malaysia Act 2009.

It has come to the point where Zeti has had to deny that there was any political interference in her decision not to pursue another five-year term as governor, which, if the King gave his consent, would have made her the longest serving governor, surpassing Tun Ismail Mohamed Ali’s 18-year tenure.

Zeti has also said that the governor’s position should not be politicised. She made that clear in a Wednesday media briefing on the annual as well as financial and payment systems reports that the central bank’s independence should be safeguarded in order that it can fulfill its duties and responsibilities.

Bank Negara is seen by the public as about the only institution that has stood its ground on 1MDB and this was underscored by Zeti’s comments in last Wednesday’s media briefing that she would like to resolve the 1MDB issue before she leaves office.

But there is little chance that she can resolve the issue in the weeks remaining to her as governor. It is very likely that her successor will have to deal with the issue relating to 1MDB’s failure to submit documentary evidence pertaining to its inability to repatriate the US$1.83bil (RM7.16bil) that was used abroad.

Whoever succeeds Zeti will also have to manage monetary and financial stability at a volatile time for the global economy.