Search for BOI Governor Continues


The continued dithering over the appointment of a successor to Stanley Fischer as governor of the Bank of Israel contributes to the shekel’s continued gains on the dollar and causes damage to the economy, according to a leading economist quoted in Globes on Sunday.

“The prime minister has not given up his attempt to find a foreign appointment and … continues to ignore deputy governor Karnit Flug, despite the price to the image of economic leadership that the appointment process is taking and the harm caused by the strengthening of the shekel,” said IBI Investment House chief economist Rafi Gozlan.

“The foot-dragging in the appointment of a governor is working in favor of the strengthening of the shekel because of objections against appointing Karnit Flug, who is seen as continuing Stanley Fischer’s policies,” says Gozlan. “Any other appointee as governor must prove his commitment to stemming the strengthening of the shekel.”

Flug is acting governor and Fischer’s own preference for the post, but Netanyahu has passed over her because she lacks the necessary stature, according to media reports.

Meanwhile, on Sunday the Prime Minister’s Office denied reports that it had submitted the names of four nominees for Bank of Israel governor to the Turkel Committee for vetting.

The media has been awash with stories of former Argentine Central Bank president Mario Blejer being favored for the job.

Other names mentioned were that of BOI deputy governor Tzvi Eckstein, former Finance Ministry director and Bank Mizrahi CEO Victor Medina and current Finance Ministry accountant-general Michal Abadi- Boiangiu.

Blejer, 65, served in senior positions at the International Monetary Fund and World Bank before a brief stint as president of Argentina’s central bank during the country’s economic crisis in 2002. He stepped down after a disagreement with the economy minister, Reuters reported.

As for what to expect from the potential governors, Gozlan said that both Blejer and Eckstein would likely carry on in the Fischer mode as far as monetary policy and controlling the shekel are concerned. However, he added that Eckstein has a deeper knowledge of the Israeli economy.

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