Fischer Successor to Be Named by End-June, Official SaysAlisa Odenheimer and Gwen Ackerman
Prime Minister Benjamin Netanyahu will appoint a successor to Bank of Israel Governor Stanley Fischer before he leaves office June 30, an official in the premier’s office said, amid reports the Israeli leader is casting abroad for a candidate.
Netanyahu doesn’t have concerns about the transition process because the leadership at the bank is strong and professional, the official said. Deputy Governor Karnit Flug is being seriously considered, as are other candidates, he said, speaking on condition of anonymity because he wasn’t authorized to discuss the confidential selection process..
Then-Prime Minister Ariel Sharon stunned Israel eight years ago when he announced he had persuaded Fischer, a former No. 2 official at the International Monetary Fund, to become Israel’s central bank governor. Israeli newspapers say Netanyahu is looking again for an internationally known economist to fill the job. Names that have been floated include Ben S. Bernanke, Martin Eichenbaum, Elhanan Helpman and Laurence Meyer.
Under Israeli law, Flug, Fischer’s hand-picked deputy, will become acting governor upon his departure, unless Netanyahu installs a replacement by then.
“It’s possible he may go for a temporary or acting appointment,” said Yaniv Pagot, chief strategist at Ramat Gan, Israel-based Ayalon Group Ltd. “If he finds someone else afterward, then he can make the switch, and if not, he can then make the appointment permanent. Unless he surprises everyone and manages at the last minute to find a star.”
Fischer’s own appointment involved the naming of an interim governor. In 2005, then-deputy governor Meir Sokoler led the central bank temporarily while a screening committee reviewed Fischer’s candidacy.
The governor announced in January that he would step down midway through his second term and hasn’t said what he will do next.
With no replacement named, foreign investors have trimmed holdings on uncertainty about central bank policy, Yshai Shilo, a fixed-income broker at Tel Aviv’s I.B.I.-Israel Brokerage & Investments Ltd., said by phone last week. The yield on Israel’s 4.25 percent benchmark notes due March 2023 has risen in four of the past five weeks, closing at 3.86 percent, the highest since June 12, in Tel Aviv today.
The handover takes place at a time when the central bank is calibrating its policy to contend with slowing growth, a strengthening shekel, sluggish global demand and rising housing prices. Policy makers are to decide on the benchmark interest rate June 24, with nine economists predicting they will hold at 1.25 percent and seven predicting a third, quarter-point rate cut since mid-May, according to a Bloomberg survey.
The Fischer-led monetary policy committee has lowered the benchmark interest rate eight times since September 2011 in an effort to boost growth. It cut the rate twice last month and announced a foreign currency buying program, citing the shekel’s appreciation and dimmer outlooks for global growth.