Fischer Quit After Verifying New Central Bank Law Worked

Bank of Israel Governor Stanley Fischer said he decided to step down after confirming the monetary policy committee set up under a new central bank law was functioning properly.

Fischer, 69, announced on Jan. 29 his plan to quit at the end of June. Zambian-born Fischer took the helm in 2005 after earlier jobs as No. 2 at the International Monetary Fund and vice chairman at Citigroup Inc.

“What I said to myself is, until I know that the new Bank of Israel law is working, I’m going to stay,” Fischer said at a briefing for the foreign press in Jerusalem today. “I think the Bank of Israel law is working. I think the monetary policy decisions are being made in a better framework than they were some time ago.”

Asked whether he would be interested in becoming head of the U.S. Federal Reserve, Fischer replied: “I was told when I was 25 never to accept an offer I hadn’t been given, and I’m not commenting on that.”

A former economics professor at the Massachusetts Institute of Technology, Fischer was Federal Reserve Chairman Ben S. Bernanke’s thesis adviser. From 1988 to 1990, he was chief economist at the Washington-based World Bank. At the IMF in the 1990s, he worked to resolve financial crises in Mexico, Russia and Southeast Asia. He was vice chairman of Citigroup from 2002 to 2005.

Personal Reasons

Asked whether he had been offered the finance portfolio in Prime Minister Benjamin Netanyahu’s government, Fischer said: “There’s a rumor to that effect. I don’t like to talk about one-on-one conversations.”

Fischer said on Jan. 30 he decided to step down for personal reasons, mostly because his family is in the U.S. and he’s achieved most of the goals he had set out to accomplish.

Fischer toyed previously with the idea of leaving the bank before his term ended in 2015. He put himself forward as a candidate for the leadership of the IMF in 2011. He was disqualified as he was older that the organization’s age limit of 65, and the position went to France’s Christine Lagarde.

European Central Bank President Mario Draghi was also taught by Fischer at MIT in Cambridge, Massachusetts. Bank of England Governor Mervyn King said on Jan. 29 he has the “highest admiration” for Fischer and called his resignation “a loss to the central banking community.”

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