BOI Governor Choice Delayed by Netanyahu-Lapid Dispute

YERUSHALAYIM -

The announcement of the next governor of the Bank of Israel, which was scheduled for Motzoei Yom Kippur did not materialize, and sources inform Globes that a dispute between Prime Minister Binyamin Netanyahu and Minister of Finance Yair Lapid is delaying the appointment.

Last week, Committee for the Appointment of Senior Civil Servants chairman Judge (emeritus) Yaakov Turkel approved three candidates for the job: Prof. Mario Blejer; Prof. Zvi Eckstein; and Victor Medina.

Lapid’s aides denied the story to Globes, but the Prime Minister’s Office confirmed it, saying, “The matter will take a few more days.”

Two previous candidates withdrew their names after questions were raised about their fitness for the position. Netanyahu’s aides are reportedly anxious that one of the current candidates might decide to pull out rather than risk similar public embarrassment.

Prof. Mario Blejer is considered the leading candidate.  He is a former Governor and Deputy Governor of the Argentine Central Bank and was the Deputy of Bank of England Governor Mervyn King. Blejer, 65, has a Ph.D. from the University of Chicago and is a world renowned expert on monetary policy and emerging markets.

However, his detractors contend that Blejer lacks the world-beating record of his predecessor. As one said, “He is no big deal in the world and does not come close to the reputation of Stanley Fischer.”

The second candidate, Prof. Zvi Eckstein, 64, is Dean of the Faculty of Economics at the Herzliya Interdisciplinary Center (IDC) and a former Deputy Governor of the Bank of Israel under Fischer. His former boss’s refusal to support his campaign to become Governor is a strike against him.

The third candidate is Victor Medina, 74, a former Deputy Governor of the Bank of Israel under Moshe Mandelbaum three decades ago. He enjoyed notable success story in two key roles previously as director general of the Ministry of Finance and CEO of Mizrahi Tefahot Bank.

But Medina also has his share of opponents. Academics are said to be critical of him. Prof. Omer Moav, an expert in macroeconomics told Globes, “Medina hasn’t got a clue about macroeconomics, including about monetary policy issues. From his point of view everything can be summed up in one word: devaluation, devaluation and more devaluation.”