Reserve Bank of India's (RBI) Raghuram Rajan was revealed as Governor of the Year in the Central Banking Awards for 2015 today, while the Reserve Bank of New Zealand (RBNZ) scooped the prize for Central Bank of the Year.
"I am honoured to be named governor of the year by Central Banking," says Rajan. "This is a recognition of the part the Reserve Bank of India and its staff have been playing in bringing macroeconomic stability to the Indian economy, in creating more competition and new growth opportunities in the banking and financial markets, as well as in expanding financial inclusion."
From left to right: Raghuram Rajan, RBI; Lesetja Kganyago, Sarb; and Graeme Wheeler, RBNZ
Rajan was one of three individuals to be honoured this year, with Jacques de Larosière winning the Lifetime Achievement Award after a lengthy struggle for monetary order.
Meanwhile Claudio Borio, head of the monetary and economic department at the Bank for International Settlements, was handed the inaugural award for Economics in Central Banking, designed to recognise significant contributions to the field.
Alongside the Reserve Bank of New Zealand, the other winners of the central banking categories were the South African Reserve Bank (Reserve Manager of the Year), the Czech National Bank (Transparency Award) and the Bank of Canada (Website of the Year).
In the market practitioner segment of the Awards, BlackRock walked away with Asset Manager of the Year for the second year running, while State Street were named Global Custodian of the Year.
Standard Chartered Bank (Foreign Exchange Dealer of the Year), Norges Bank Investment Management (Sovereign Investor of the Year), Innovia Security (Banknote and Currency Services Provider of the Year) were also victorious.
As too were Eurex Clearing (Payments and Market Infrastructure Provider of the Year), Polaris (Technology Provider of the Year) and SkySparc (Consultancy and Advisory Services Provider of the Year).
Rajan's successful first year
The judging panel, comprising members of the Central Banking editorial staff and former central bank governors sitting on the journal's advisory board, cited Rajan's disciplined and focused approach to tackling macroeconomic instability as a reason for him winning the award. They also singled out his forthright observations about some of the less welcome developments in the global economic, financial and monetary system, which the judges believe represent an important voice for change.
"His deep understanding of the root causes of economic problems, combined with an impressive leadership style, inspires confidence and has helped to transform perceptions about the vulnerabilities of the Indian economy," says Christopher Jeffery, chairman of the Central Banking Awards Committee and editor of Central Banking journal.
Rajan himself also praised the co-ordination efforts of government, but sees his work as being far from done. "All our collective efforts should be seen as work in progress – inflation has to be fully tamed, growth has to be brought back to potential and the banking system cleaned of distressed assets, even while we build the platform for the financial sector to support strong and sustainable growth," said Rajan. "But I am convinced we are moving in the right direction and believe developments will affirm this."
RBNZ the ‘standout' central bank
The RBNZ was chosen as Central Bank of the Year after successfully using its macro-prudential powers to cool New Zealand's housing market, while becoming the first advanced economy central bank to raise interest rates in the current cycle.
"I wish sincerely to thank Central Banking. It is an honour for the Reserve Bank to receive this award and humbling to receive such recognition among peers," governor Graeme Wheeler said.
"2015 is expected to be another highly challenging year for central bankers. We are likely to see more quantitative easing than at any time since 2011, with associated exchange rate pressures.
"Markets will closely watch how central banks respond to falling oil prices, developments in the eurozone, Russia and Greece, and the implications flowing from policy signals by the Federal Open Market Committee."
Jeffery said the "joined-up approach to monetary and macro-prudential policy, excellence in communication and governance, updated risk management, improved supervision and upgrades to security" at the RBNZ made it the "standout central bank in the past year".
From left to right: Jacques de Larosière; Miroslav Singer, CNB; and Stephen Poloz, Bank of Canada
De Larosière wins Lifetime Achievement Award
Former managing director of the International Monetary Fund, governor of the Banque de France and president of the European Bank for Reconstruction and Development, Jacques de Larosière was also unveiled as the winner of the Lifetime Achievement award.
"I am most honoured, delighted and grateful to have been chosen as the winner of Central Banking's Lifetime Achievement Award," de Larosière said. "The fact that it is Central Banking journal that has made that decision is for me invaluable. I am indeed a faithful reader of the journal and I've had many occasions to appreciate the quality of the articles it has published."
A champion of international monetary stability, de Larosière was behind many economic successes during the latter part of the 20th century. He helped save the international monetary system from the collapse of Bretton Woods, and was a key driving force behind Economic and Monetary Union in Europe.
Central banking successes
Lesetja Kganyago, the South African Reserve Bank (Sarb) governor said the institution was "honoured" to be named Reserve Manage of the Year, after being singled out as a "benchmark" for central banks seeking a modern capability in reserves management.
"This award recognises the work done by staff at the Bank that ensures its operations are at the forefront of reserves management practices. Such recognition is particularly meaningful in the light of the growth in South Africa's gross foreign exchange reserves from 2004 to 2010, which necessitated significant changes to how the Bank manages its reserves," Kganyago said.
Looking ahead, the governor highlighted new challenges on the horizon for reserve management. "The growth in reserves has brought about new challenges in dealing with the costs associated with the accumulation of assets that yield less than domestic interest rates. Returns in some of the major reserve currencies are likely to remain low, or even negative, for the foreseeable future," he said.
"However, there is also the high likelihood of diverging policy paths in major reserve currencies where high policy rates may bring about capital losses. In addition, the shrinking pool of high-quality assets comes into direct conflict with the core objective of capital preservation. Reserves management will, therefore, remain a key focus area for many central banks."
The Czech National Bank (CNB) was handed the Transparency Award for 2015 after speeding up its communications procedures in the wake of its momentous exchange rate commitment, expanding into social media and creating an online blog for senior policy-makers.
"Transparency is both a necessary condition for central bank independence and a tool for making the conduct of central bank policies smoother, faster and more efficient," CNB governor Miroslav Singer said. "I am very happy that the efforts of our staff and our board have been recognised by the professional community. This award underlines that we are capable of improving our standards in the field of communication."
The final central bank award – Website of the Year – was won by the Bank of Canada after the institution revamped its website in 2014. The Bank of Canada's online presence now boasts responsive design features and a navigational structure that allows the general public, market participants and journalists alike to efficiently find the information they need.
Moreover, it has offered a template for websites developed for the European Central Bank's Single Supervisory Mechanism and the Financial Stability Board. Fellow central bankers and regulators consider the Bank of Canada's website the 'gold standard' in the industry.
Governor Stephen Poloz said the central bank was "absolutely delighted" with the award, which recognises the work of its web team. "They've created a website that engages the Bank of Canada's audiences with relevant information they can easily access regardless of the devices and platforms they use. This is what people expect of their central bank," Poloz said.
Economics in Central Banking
One subject policy-makers have returned to time and again in the past year has been the issue of global spillovers. Emerging markets have protested at the impact of Fed policy on volatile capital flows, while economists have begun to sound the alarm on dangers resulting from excessive monetary easing.
Against this backdrop, Claudio Borio's paper, The international monetary and financial system: its Achilles heel and what to do about it, published in August 2014, stands out for tackling the problem holistically and focusing policy-makers' attention on an aspect of the economy that is oft-neglected – the capital account.
The paper's original approach, global scope and consideration of the policy implications make it stand out from the competition, and saw Claudio Borio secure the inaugural award for Economics in Central Banking.
From left to right: Thomas Book, Eurex; Wai-Kwong Seck, State Street; and Sean Wallace, Standard Chartered
Market practitioner excellence
BlackRock, which manages more than $260 billion in assets for central banks, sovereign wealth funds and other official institutions, was revealed as Asset Manager of the Year for 2015 – the second year running that it has been victorious.
It was described as a "reliable and adroit" partner for central banks by Central Banking because of its "unrivalled geographic, asset class and investment-style capabilities, enabled it to remain the pre-eminent asset manager for sovereign institutions".
The strengthening dollar will pose many challenges and opportunities for central banks in 2015 and beyond. We look forward to working with our clients to help them manage their unique circumstance," said Terrence Keeley, global head of the official institutions group at BlackRock.
State Street, the Global Custodian of the Year, cemented its position as one of the top-flight global custodians for central banks and other official institutions during the past year. It was handed the award after expanding and refining its offerings to help clients deal with an increasingly challenging environment driven by new regulation, more complex investment products and the difficulties of navigating volatile markets.
Wai-Kwong Seck, executive vice-president and head of State Street Global Services and Global Markets in Asia Pacific, said the company would "continue to deepen our investments in technology and enhance our capabilities to deliver cutting-edge solutions customised to meet their future challenges".
One of the five new awards adopted in this, the second year of the Central Banking Awards programme, was handed to Standard Chartered Bank.
It was named Foreign Exchange Dealer of the Year after playing a pivotal role in assisting central banks and sovereign funds to diversify their holdings into emerging market currencies, in the face of changing perceptions about the relative risk and return profile of G-3 versus emerging markets.
"We are delighted and truly honoured to receive this inaugural award," says Sean Wallace, group head of corporate and institutional clients at Standard Chartered. "We continue to channel a great deal of our efforts and resources to serve public sector clients as important investors into our footprint markets and in a trusted adviser capacity in the 70 countries we have presence in."
"Double-A rated Standard Chartered – despite its lack of a US primary dealer licence – has emerged as a pre-eminent partner for central banks when it comes to forex dealing, particularly in emerging currencies," Jeffery added.
Norges Bank Investment Management continued its programme of diversification in the period under review, while posting strong returns that made every Norwegian citizen a ‘paper millionaire'. This, combined with its transparent approach to ownership, saw it named Sovereign Investor of the Year.
Working to build trust
Another new award, Banknote and Currency Services Provider of the Year, was handed to Innovia Security, which stood out from the competition for its collaborative approach with central bank partners.
The provider of polymer banknotes also secured a major contract with the Bank of England, will supply new banknotes in New Zealand and saw the final Bank of Canada Frontier note unveiled in outer space in 2014.
"This service provider award encourages us on our journey to deliver high quality guardian product supported by service that fully addresses the needs of our customers," said Bernhard Imbach, managing director of Innovia Security.
"We are always looking to lift our customer service levels as part of a continuous improvement process. Ultimately, Innovia Security must establish a trusted working relationship with every customer, and this award indicates we are on the right path."
From left to right: Terrence Keeley, BlackRock; Claudio Borio, BIS; and Bernhard Imbach, Innovia Security
Effective technology platforms
Meanwhile, Eurex Clearing is one of the driving forces helping the over-the-counter derivatives industry to meet important new G-20 regulatory requirements, while also improving cross-margining services for clients and bolstering its risk management capabilities.
This is in part the reason it was named Payments and Market Infrastructure Provider of the Year. "Eurex Clearing was already a potent force for clearing repos, securities lending and cash markets," Jeffery said. "But it is now well poised to capture a large portion of OTC derivatives activity as well, complying with new regulation and introducing new products into a changing market."
"It is a recognition of our mission to provide market-leading risk management and client-protection services," said Thomas Book, chief executive of Eurex Clearing. "Our role as a CCP is to reduce systemic risk in financial markets and to protect our clients from counterparty risks in an efficient way. This award encourages us to continue on our path of innovation in the central counterparty space under a new regulatory environment."
Polaris scooped Technology Provider of the Year after winning contracts with a number of central banks, including, perhaps most prominently, the RBI.
Its work with central banks is built around a system dubbed the ‘Quantum Core Banking Solution', which delivers a modular, flexible platform that can integrate with many other payment systems. This helps central banks to upgrade and automate their core banking systems.
"Central banks play an important role in removing the frictions in the financial system and acting as a change agent," Polaris chairman Arun Jain said. "We are privileged to partner with central banks around the world as they become more proactive in meeting the challenges in the global economy."
Meanwhile, the inaugural award for Consultancy and Advisory Services Provider of the Year was handed to Swedish firm SkySparc, which has helped to test and upgrade treasury management systems at major European central banks.
It has proven instrumental in helping to tackle growing volumes of securities transactions and cashflows, a major issue for many central banks in Europe currently. SkySparc was praised by central banks for its methodological approach and ability to focus quickly on key issues.
"We have built lasting relationships with our central banking clients based on understanding and meeting their unique and specialised needs," Thomas Bergqvist, SkySparc director, said. "We are looking forward to helping our clients meet new challenges in 2015."
The Central Banking awards were written by Christopher Jeffery, Robert Pringle, Tristan Carlyle, Daniel Hinge, Arvid Ahlund and Maria Espadinha.
Full list of winners: