Israel May Pick Bank Head Within Two Weeks, Bennett Says
Israel may appoint a new governor for the Bank of Israel within weeks following the withdrawal of two candidates to replace Stanley Fischer, Minister of Economy Naftali Bennett said.
A vacuum at the helm of the central bank “isn’t great,” he said today in an interview with Bloomberg Television. Fischer, former vice chairman of Citigroup Inc. and onetime thesis adviser to Federal Reserve Chairman Ben S. Bernanke at Massachusetts Institute of Technology, left office in June. Fischer’s deputy, Acting Governor Karnit Flug, is now in charge.
“We’re doing a meticulous job,” Bennett, 41, said, “and that’s why we’re going to have a central banker within a couple of weeks.”
Flug surprised markets on Sept. 23 with a quarter-point reduction in the bank’s benchmark rate to 1 percent, sending the shekel lower for the first week in three. The decision on a successor will be taken by Prime Minister Benjamin Netanyahu in consultation with Finance Minister Yair Lapid and must be approved by the cabinet.
The daily Haaretz reported on Sept. 29 that Netanyahu is looking for new candidates beyond the three currently under consideration.
Israel can continue for several months without a central banker and weather the embarrassment of losing Netanyahu’s first two nominees, said Alex Zabezhinsky, chief economist of DS Investment House Ltd. in Tel Aviv.
“The credit agencies say it’s not good, but it’s not dramatic,” he said. “We also see uncertainty in the U.S. over Bernanke’s successor” after former Treasury Secretary Lawrence Summers withdrew his name.
Bennett, a frequent critic of Netanyahu though once his top parliamentary aide, said the prime minister was right to excoriate Iranian President Hassan Rouhani at the United Nations this week. Netanyahu called Rouhani a “wolf in sheep’s clothing.”
“Do we hope the diplomatic process will bring the dismantling of Iran’s nuclear project, yes we hope so,” Bennett said, adding the chances of that happening are “very low.”
Bennett, whose computer security company Cyota Inc. was sold in 2005 for $145 million, returned from a trade mission to China two days ago and heads for India next week. “We’re opening up very powerfully to the East” where he seeks “to diversify Israel’s export portfolio” beyond its biggest markets in Europe and the U.S.
After leading the main lobbying group for Jewish settlers in the West Bank, Bennett ran for parliament as head of the religious party, Jewish Home. His rejection of a two-state solution to the Israeli-Palestinian conflict puts him out of step with Netanyahu, who accepts the establishment of a Palestinian state provided it’s demilitarized and Palestinians recognize Israel as a Jewish state.
“The issue primarily is the security and sovereignty issue which create many, many problems, which seem right now unsolvable,” Bennett said. “Palestinians currently do govern themselves and that’s the right way to go about it” without recognizing their statehood.
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