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PROFILE-Cyprus's central bank governor Athansios Orphanides

Published 04/28/2011, 09:58 AM
Updated 04/28/2011, 10:00 AM
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Position: Governor of the Central Bank of Cyprus

Incumbent: Athanasios Orphanides

Date of Birth: March 22, 1962

Term: Five year appointment by the President of the Republic. Eligible for reappointment. Appointed on May 3, 2007, he has been a member of the Governing Council of the ECB since Jan. 1, 2008, when Cyprus was admitted into the euro zone.

Key Facts:

-- As a voting member of the European Central Bank's Governing Council, Orphanides is considered a pragmatist on monetary policy issues, viewed as dovish in downturns, and hawkish in upturns.

-- Appointed member of the steering committee of the European Systemic Risk Board (ESRB), Europe's new financial watchdog, in January 2011.

-- Orphanides is an effective and sharp communicator who never shies away from expressing his views, including to his superiors while he was working at the Fed in the United States.

-- A fluent English speaker, he chooses his words in public carefully, almost never speaks off the cuff and keeps a low public profile, sticking largely to set speeches which he prepares with the diligence of an academic.

-- Supported ECB's controversial purchase of government bonds, and has advocated keeping the option open as a means to calm markets.

-- Orphanides left his Washington-based job as Senior Adviser in the Division of Monetary Affairs at the Board of Governors of the U.S. Federal Reserve to take up the Cypriot central bank post in 2007.

-- Earlier, he had served as Economist (1990-1996), Senior Economist (1996-2003) and Adviser (2003-2006) at the Federal Reserve. Highly regarded in economist and academic circles, Orphanides had written numerous papers before his Cyprus appointment on inflation targeting, expectations and inflation forecasting.

-- At home, his relations with the government are occasionally viewed as strained. He had publicly disagreed with an idea floated by Cyprus's Communist-led government in 2008 to sell off gold reserves, for which the Central Bank of Cyprus is responsible. He also publicly advocated a re-think of the wage indexation system, arguing it could stoke second round effects - at odds with the government, which wants the system preserved.

He has called for structural reforms to Cyprus's economy, including pension reform, arguing that present structural problems could cause deeper reforms in future if postponed.

-- Comes from a working-class background. Both of his parents were active in the left wing labour movement. After graduating with Economics and Mathematics Degrees from the Massachusetts Institute of Technology, he took his PhD in Economics at the MIT, where he studied under Stanley Fischer and Nobel-prize winning economist Robert M. Solow. While in the United States, Orphanides taught undergraduate and graduate courses in macroeconomics and monetary economics at Georgetown University and Johns Hopkins University.

-- He also served as a Fellow of the Centre for Financial Studies in Frankfurt, a Research Fellow of the Centre for Economic Policy Research in London, and an International Research Fellow of the Kiel Institute for World Economics.

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