PM to name Fischer replacement in coming days

Netanyahu hints that new nominee will be selected from abroad, casting doubt on local pick Karnit Flug.

June 10, 2013 17:22
2 minute read.
Bank of Israel Governor Stanley Fischer

Bank of Israel Governor Stanley Fischer 370. (photo credit: Sasson Tiram)


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Prime Minister Binyamin Netanyahu on Monday said he would announce the successor to outgoing Bank of Israel Governor Stanley Fischer in the coming days, but cast doubt upon the possibility of Fischer’s deputy Karnit Flug taking the position.

At the start of the Likud- Beytenu faction meeting, Netanyahu said the decision was tough, but that the new governor would “continue the impressive list of Frankel and Fischer.” The reference to those two particular former governors hinted that the nomination would go to an international academic. Like Fischer, Jacob Frankel, who served two terms as BoI governor in the 1990s, held prominent academic roles and had served as a top researcher in international organizations. Both were brought into the position from abroad; Fischer was not even an Israeli citizen at the time of his nomination.

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Though Flug, who has received vocal support from Knesset members in leading economic positions in recent days, received her doctorate at Columbia University and conducted research at the International Monetary Fund and Inter-American Development Bank, she was not an academic macroeconomist at a major university abroad, as Frankel and Fischer had been.

On Monday, Knesset Economics Committee chairman Avishay Braverman (Labor) threw his support behind Flug at the committee’s final meeting with Fischer, saying “I very much hope that soon she will get the position that is appropriate, that is appropriate to us and to Israel.”

A week earlier, at Fischer’s final meeting with the Knesset Finance Committee, MK Gila Gamliel (Likud Beytenu) also expressed her hopes that Flug would become the bank’s first female BoI governor.

Fischer himself has said that he has full confidence in Flug’s ability to fill the position.

Netanyahu’s remarks notwithstanding, former Bank of Israel chief economist Asher Blass, who was a colleague of Flug’s and now runs the ERCG consulting group, says the deputy governor has as good a shot as any.

“She has many years of experience, she knows the Bank of Israel very well, she’s an accomplished labor economist, she’s worked abroad, and I think she’s very much an issues kind of person. In that sense, she could be a good choice,” he told The Jerusalem Post.

But whatever the MKs dealing with financial and economic policy may have to say, they have little influence on the final outcome. The governor is nominated by the prime minister and the finance minister, and then must be approved by the government, and thus far, all are remaining mum.

“[Finance Minister Yair] Lapid is discussing it with the prime minister and will announce it at the appropriate time,” his spokesman said.

While Justice Minister Tzipi Livni “welcomes any advances for women,” she refused to comment until an official selection was made.

Even if Lapid and Netanyahu do not ultimately settle on Flug, she will likely be the de facto governor for a short period of time. With Fischer expected to step down at the end of the month, Flug will serve as acting governor until his successor is appointed.

In January 2005, then-prime minister Ariel Sharon’s announcement of Fischer’s nomination took place just a week before outgoing governor David Klein was to step down. Klein’s deputy at the time, Meir Sokolor, held the position of acting governor until Fischer was sworn in four months later.

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