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Approved BOJ deputy governor nominee Shirakawa known as theorist.

TOKYO, March 13 Kyodo

Masaaki Shirakawa, whose nomination for one of the Bank of Japan's two deputy governorships was approved by the Diet on Thursday, is known for his theoretical approach to monetary policy.

An economics professor at Kyoto University, Shirakawa, 58, was once regarded as the BOJ official most familiar with central banking.

After graduating from the University of Tokyo, he joined the BOJ in 1972. Shirakawa then studied at the University of Chicago, specializing in theories of money supply adjustment.

He was later sent to the BOJ's New York office. His vast international network of connections includes officials at the U.S. Federal Reserve and other central banks in major economies.

Shirakawa became an executive director of the BOJ in 2002 under then Governor Masaru Hayami and remained in the post, mainly in charge of monetary policy planning, until 2006 when he became a professor.

He is known as an architect of the unusual credit-easing policy known as ''quantitative easing'' introduced under Hayami in 2001. He gave theoretical backing to the measure, under which the central bank flooded the financial system with ample liquidity to keep a key interest rate at around zero.

While putting priority on policies to fight deflation and accelerate bad-loan disposal under Hayami's successor, Toshihiko Fukui, Shirakawa often bore the brunt of criticism from the government and the ruling Liberal Democratic Party, according to his former colleagues.

In his policy speech in the Diet on Wednesday, Shirakawa said the BOJ must ''consider not only economic situations as a short-term trend but also medium- to long-term risks when making monetary policy decisions.''
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Publication:Japan Weekly Monitor
Date:Mar 16, 2008
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