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Friday, August 29, 2003

Central Banker Pay

The Economist has a new "Big Money" index, to go with its Big Mac index, tracking the pay of central bankers around the world. I want the Hong Kong job:

"Alan Greenspan, the world's most important central banker, is one of its lowest paid, on only $172,000 a year. In contrast, says a survey of central bankers' pay by Central Banking Publications, Wim Duisenberg, soon to step down at the European Central Bank, earns a handsome $417,000. Even that is less than the head of the Netherlands' central bank (Mr Duisenberg's old job).

"In truth, the Big Money index has a fatal flaw: central bankers are neither tradable nor (like Big Macs) identical goods. Europe's look overpaid. In a global competitive market where consumers can compare prices and shop around, prices in different countries should converge. But we are far from such a market in central bankers. The world's most lavishly paid is Joseph Yam, of the Hong Kong Monetary Authority, who earns 6.5 times as much as Mr Greenspan--although Hong Kong has a currency board backed by dollars, so that all its important monetary decisions are taken by America's Federal Reserve."