Watch Asian central bank balance sheets: BIS urges<\/p>\n
SYDNEY, Australia (Reuters): The Bank for International
\nSettlements said on Tuesday more attention should be paid to the
\nbalance sheet independence of central banks in Asia.<\/p>\n
In a discussion paper for the Reserve Bank of Australia's
\nannual conference in Sydney, BIS official Robert McCauley said
\nprogress had been made in Indonesia and South Korea since the
\nevents of the Asian crisis.<\/p>\n
"More attention should be paid to the balance-sheet
\nindependence of central banks," McCauley said in a paper on
\nsetting monetary policy in East Asia.<\/p>\n
"Here there is clear progress in Indonesia and Korea since the
\ncrisis in extinguishing central bank credit extended to banks,"
\nhe said.<\/p>\n
McCauley said Korea had worked "half its way" out of the
\nbalance sheet implications of the crisis.<\/p>\n
Events during the Asian crisis had left big marks on the
\nbalance sheets of Bank Indonesia, Bank of Thailand, and to a
\nlesser extent, the Bank of Korea.<\/p>\n
He said the balance sheet aftermath of crisis could, at the
\nlimit, impair the capital and weaken the income of the central
\nbank.<\/p>\n
This could hurt its credibility in the market place and make
\nit dependent on appropriations.<\/p>\n
The BIS paper was one of several under discussion at the
\nReserve Bank of Australia's annual conference.<\/p>\n
The conference was also attended by many senior officials from
\nAsian central banks, who came to Sydney for the Executive Meeting
\nof East Asia-Pacific (EMEAP) central bank governors on Monday.<\/p>",
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