Bank of Israel Governor Stanley Fischer said today he was leaving the Bank of Israel because “eight years is a long time” and that he aimed to remain in public life in some capacity in future.
“I have no plans for the future,” Fischer said. “I have no new job but I intend to be involved in public life in the country and hope that my voice will continue to be heard in public debate. Israel is my second home and I don’t know if that’s any less than my first home.”
Fischer will step down midway through his second five-year term, leaving behind an economy that has rebounded from the global financial crisis faster than most peers and whose main stock index has outperformed its U.S. and European counterparts.
“I meant to leave exactly at the end of the eighth year, but the prime minister suggested that I continue until the budget is submitted and so I’ll leave at the end of June,” the 69-year-old former International Monetary Fund No. 2 said at a press conference in Jerusalem.
The challenge for Fischer’s successor will be stepping into the shoes of a man who once served as thesis adviser to Federal Reserve Chairman Ben S. Bernanke, and who at the Bank of Israel broadened the focus to include growth as well as inflation. The first items on the agenda may be to prod Prime Minister Benjamin Netanyahu to shrink a budget deficit that grew to 4.2 percent of gross domestic product last year, and to slow the rise in housing prices.
“He’s done marvels in Israel,” Nobel laureate Robert Solow, who taught Fischer and then worked alongside him at the Massachusetts Institute of Technology, said in a telephone interview. “He’s played a terribly important role and I’ve no idea how they’ll replace him.”
Israel produced better risk-adjusted returns than all other developed stock markets in the past decade as the technology-driven economy attracted global investors.
The BLOOMBERG RISKLESS RETURN RANKING shows the Tel Aviv TA-25 Index returned 13.4 percent in the 10 years ended Jan. 29 after adjusting for volatility, the highest among 24 developed-nation benchmark indexes. Israel beat the Oslo OBX Index, the next-best market with a risk-adjusted gain of 13.2 percent.
“I’ve achieved most of the goals I set for myself,” said Fischer, who wore a pink tie and spoke to reporters from a Bank of Israel boardroom. “I leave the economy in good condition but facing serious challenges.”