Top currency official eyed for ADB presidency

Bloomberg

The administration is considering Vice Finance Minister for International Affairs Takehiko Nakao, the nation’s top currency official, as a candidate to lead the Asian Development Bank under the assumption that current ADB head Haruhiko Kuroda becomes the next Bank of Japan governor, Finance Minister Taro Aso said Tuesday.

“There will be an election to decide the presidency of the Asian Development Bank, so we have to campaign for Japan to win that position,” Aso said. “There are various candidates, but he is probably one of them,” he said when asked if Nakao should take the position.

Japan has held the presidency of the Manila-based ADB since the institution was founded in 1966 and is tied with the U.S. as having the largest voting power at the development bank. The U.S. has monopolized the leadership of the World Bank, while Europeans historically have chosen the head of the International Monetary Fund.

“Japan and the U.S. are still the largest shareholders and the U.S. has no intention to assume the presidency of the ADB,” Masahiro Kawai, dean of the Tokyo-based Asian Development Bank Institute, said in an interview last month.

China, Asia’s largest economy, lacks sufficient support to grab the role and Japan can retain its hold, Kawai said.

Nakao, 56, oversaw the government’s biggest-ever one-day currency-market intervention, on Oct. 31, 2011, after the yen reached a postwar high of 75.35 per dollar.

The currency official, who joined the Finance Ministry in 1978 and has an MBA from the University of California, Berkeley, is the author of a 2008 book, “America’s Economic Policy: Can it Sustain its Strength?” In 2010, he said the stability of the international financial system is premised on the dollar as a “key currency.”