Who should replace Stanley Fischer?

Stanley Fischer’s nomination eight years ago may have marked the start of what could become a trend: the aggressive global solicitation of central bankers on the sole basis of merit, without regard to citizenship.

February 5, 2013 05:14
2 minute read.
Bank of Israel Governor Stanley Fischer following his resignation, January 30, 2013.

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


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Reading newspaper articles this morning suggesting that investors in Israeli Government Bonds had been hoodwinked by the timing of the announcement of BoI Governor Stanley Fischer's departure, one can't help think that the importance of the person occupying that role extends far beyond Israel's borrowing costs. Much has been written in the Israeli and world press in recent days about Stanley Fischer's measurable contributions to the Israeli economy, including the BoI Law, bold and timely monetary policy decisions, and professionalization of internal BoI decision making processes. But less-measurable, and perhaps Fischer's most important contribution, has been the credibility he has lent to the Israeli economy. Much of this credibility is an outgrowth of the above contributions. But much of it, possibly most of it, came with the person, and was earned far before he took his current post. This makes the question of Fischer's successor important. There is another factor which makes it urgent. 

Stanley Fischer's nomination, eight years ago, may have marked the start of what could become a trend; the aggressive global solicitation of Central Bankers on the sole basis of merit, without regard to citizenship - pursuing the best person in the world for the job. The Bank of England's nomination of Canadian Mark Carney as Governor of the BoE in November 2012 created a second data point. This may become a trend. It constitutes an opportunity for Israel, but it may only be a one-time opportunity. An opportunity in that, with the practice of foreign nominations possibly becoming established, and the international status that Stanley Fischer has lent to the position, president Peres and Prime Minister Netanyahu may have a realistic shot at attracting a number of true international economic luminaries to submit their candidacy. One-time in that our international status may be temporary, and could be lost if not maintained continuously. It would likely not be difficult to compile a list of internationally-recognized names with both the appropriate qualifications and an affinity to Israel. I will not do so here.  All are better known to our still-serving Governor. Some may already be in Israel. 
But many are likely not in Israel. Some readers might feel that the Hebrew language presents a critical obstacle to foreign nominations. One must consider that in an increasingly globalized, increasingly competitive world, our competition is casting increasingly wider nets in its search for talent. If we limit our own search to the world's seven million or so fluent Hebrew-speakers, we are likely to fall behind over time. This is especially true in fulcrum positions like Central Bank Governor, in fulcrum times like these. Clearly, many accommodations would be required by the BoI, the Israeli Government, and Israeli society, in order to secure the best person in the world for the job should she or he happen to be an English speaker. I believe it is well worth considering.

The writer is CEO of KCPS and Co. and is a Young Global Leader of the World Economic Forum.

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