NEWSMAKER-Serb central bank nominee to look at 'wider picture'

By Gordana Filipovic

BELGRADE, April 13 (Reuters) - Serbia's nominee for central bank chief, Dejan Soskic, may prove more open to calls to make lending cheaper than his predecessor Radovan Jelasic, who had kept policy tight to curb inflation.

A central bank insider, Soskic has not had a banking career and briefly ran a local brokerage for a year a decade ago, while his academic efforts have been focused on faster financial market development and adjustment to international standards.

As new central bank chief, he now needs to juggle pressures from the government and businesses to deliver cheap and ample liquidity to create dynamic growth and new jobs while at the same time keeping prices and the dinar currency stable.

Talking to Reuters a couple of hours after being nominated, Soskic said there would be no compromise over price stability. 'But monetary policy must also take into account a wider macroeconomic picture, including gross domestic product (GDP) growth and unemployment,' he added.

Serbia's ruling coalition nominated Soskic on Monday to replace Jelasic, who resigned abruptly as governor last month after long arguing that Serbia had to live within its means.

If approved, Soskic will be the third non-party official, besides Prime Minister Mirko Cvetkovic and Finance Minister Diana Dragutinovic, to be backed by President Boris Tadic's Democratic Party -- the pillar in the ruling coalition of pro-Western parties and populists which seeks to get Serbia into the EU.

Soskic does not have a monetarist background or the 'sense of restrictiveness which normally goes with monetarists and macro-economists,' said Milko Stimac, head of Serbia's Securities Commission.

'But his liberal convictions are healthy, at least when it comes to his views on financial markets,' Stimac added, referring to Soskic's commitment to adjusting Serbia's financial markets and regulatory framework to international standards.



CONTINUITY, WIDER FOCUS

Soskic, 43, chairs the central bank's supervisory board, which monitors the bank's financial statements and tariffs and sets wages for bank employees.

Serbia, hard hit by the global credit crisis, agreed to an International Monetary Fund loan programme in early 2009. Its economy shrank by 3 percent last year.

The benchmark interest rate is currently at 8.5 percent, the lowest since August 2006 when the central bank launched inflation targeting and made the dinar exchange rate regime more flexible in a bid to achieve price targets.

Jelasic resigned on March 23 for personal reasons, but his decision appeared to be his way of rebuffing a government that wants to boost living standards through higher wages and pensions and cheap dinar loans in a country where no cabinet has served its full term since 2000.

Asked if he could be described as dove or hawk when it comes to interest rates direction, Soskic said: 'Neither.'

In recent interviews, however, Soskic was clear about a need to cut rates but only if the cash ends up in investment lending to companies. Alternatively, banks can finance longer-dated government debt, due to be issued in early May.

'I would not like to be in his shoes,' said Dejan Eric, head of the Institute of Economic Sciences. 'He will be in charge of monetary policy in a country which is still in crisis, runs big deficits, has many structural problems. The government may be stable, but ... each coalition party pursues its own interests.'

Soskic likes fast cars, motorcycles, basketball and rock music. Friends and colleagues also describe him as a moderate, committed to his academic career and focused on developing financial markets.

Beside policy continuity, bankers expect Soskic to press on with converging Serbia's bank supervisory rules with those of the European Union and to give a boost to financial markets and Serbia's insurance sector.

(Editing by Ruth Pitchford) Keywords: SERBIA GOVERNOR/SOSKIC ([e-mail]; [phone]; Reuters Messaging: [e-mail]) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.