Israel's financial markets welcomed the nomination of Citigroup Vice-Chairman Stanley Fischer as governor of the Bank of Israel, the country's central bank. The Tel Aviv stock index rose 1%, to an all-time high, after the decision was announced on Jan. 9.
A former economics professor at Massachusetts Institute of Technology and onetime first deputy managing director of the International Monetary Fund, Fischer, 61, is expected to push for greater competition in the banking industry as well as a reduction in Israel's government sector, which accounts for more than 50% of gross domestic product.
Fischer may also serve as a goodwill ambassador for Prime Minister Ariel Sharon and Finance Minister Benjamin Netanyahu as they try to raise funds to help pay for Sharon's plan to withdraw settlers from Gaza and part of the West Bank later this year. The cost of relocating some 20,000 Jewish settlers is estimated at $1.2 billion. Israel needs funds from international sources if it is to keep Netanyahu's budget deficit target of 3.5% of gross domestic product this year. Fischer is also likely to advocate more economic development for the Palestinian territories.
Born in Zambia, Fischer has long had ties to Israel. As a young man he worked on a kibbutz, and in the 1980s he advised the Israeli government on defeating hyperinflation.
Edited by Rose Brady