Finance Minister Yair Lapid on Sunday rejected a growing chorus of calls to
reform the nomination process for Bank of Israel governor by introducing a
parliamentary search committee.
“Everybody is talking about a search
committee,” Lapid said at the opening of a new railway line between Ashdod and
Ashkelon. “If there will be a search committee, will it hire a detective agency?
These are respectable people that have careers spanning decades in the State of
The calls followed an embarrassing week for Lapid and Prime
Minister Binyamin Netanyahu, in which two of their nominees for governor, Jacob
Frenkel and Leo Leiderman, withdrew their candidacies in the face of alleged
Lapid argued that there was no way of knowing what details
might be dug up, even with the aid of a search committee.
But his stance
did not stop the opposition from pushing reforms forward.
MK Itzik Shmuli
(Labor) submitted a bill Sunday to regulate the appointment
“Save us all the next embarrassment, and instead of choosing
another inappropriate candidate from within [Netanyahu and Lapid’s] group of
good friends, let’s establish a transparent, professional process with an
official search committee led by a judge,” said Shmuli, who co-sponsored the
bill with Knesset Economics Committee chairman Avishay Braverman
Shmuli added that he’d be happy for the government to adopt his
bill as its own policy, as long as it is implemented.
Lapid’s decision-making process looks like it’s offhand and spontaneous,” he
“Who knows who the final candidates will be and on what basis or
criteria they will be selected?” Currently, the prime minister and finance
minister are responsible for nominating a governor, who then must be approved by
a committee on senior civil service appointments, colloquially referred to as
the Turkel Committee because it is chaired by retired Supreme Court justice
Jacob Turkel. Complaints are made to the committee only after the candidates are
Shmuli and Braverman’s bill would require the establishment of
a search committee led by a retired Supreme Court or District Court judge. The
committee would bring its recommendations to the government for authorization at
least six weeks before the serving governor leaves his position.
public has lost its faith in the public sector,” Braverman told Army Radio
Opposition leader Shelly Yacimovich on Saturday night told Israel
Radio that she was in agreement over the need to change the
Another surprising advocate of reform is former BOI governor
“There is something defective in the process,” Klein told
Army Radio on Sunday. “The method in which a governor is chosen today, as it was
for decades, is no longer suitable. The fact that there were two quick
withdrawals is testament that the selection process was not right.”
the meantime the country’s business sector is impatiently anticipating the
nomination of a third candidate to replace Stanley Fischer, the well-respected
governor who stepped down in June after eight years in the position.
delay in appointing a governor is a strategic threat to the Israeli economy,”
Israel Manufacturers Association chairman Zvi Oren said. “In the absence of
economic leadership that can deal with the foreign exchange crisis, the Israeli
economy could go into a tailspin.”
A weekly analysis by Bank Leumi noted
that “prolonging this situation might, in the end, affect the Israeli capital
market for the worse.”
Karnit Flug, the current acting governor who was
twice snubbed for the position, remains an unlikely choice despite vocal support from the likes of Braverman,
Yacimovich and Klein.
According to Globes
, however, Netanyahu and Lapid
are running out of options. They reportedly were turned down by both Eugene
Kandel, who heads the National Economic Council, and another unnamed candidate
described as a senior official at the Bank of Israel.
For his part, Lapid
vowed to “conduct the discussion on choosing the governor slowly, calmly and
without pressure, and we will find the best man or woman to be governor for
Meanwhile, in an interview with The Jerusalem Post
Hebrew-language sister publication The Post
– his first since withdrawing his
nomination – Leiderman said the complaint lodged against him with the Turkel
Committee had nothing to do with sexual harassment, but merely suggested that
the circumstances of his leaving Deutsche Bank should be examined.
record is totally clean,” he said. “No claim or complaint of any kind has ever
been filed against me in my 34 years of work at Tel Aviv University, my 10 years
at the Bank of Israel and 10 years at Bank Hapoalim, and the two-and-a-half
years at Deutsche Bank.”
Leiderman expressed confidence that the Turkel
Committee would have approved his candidacy had he remained in the race, but
said the process would have taken over two months.
“I was not ready for
that for reasons of my health and my family,” he explained.