Leiderman Withdraws Bank of Israel Candidacy in Netanyahu Blow

Leonardo Leiderman withdrew his candidacy to become the next Bank of Israel governor, becoming the second nominee to pull out in a week and dealing a blow to Prime Minister Benjamin Netanyahu.

Leiderman, who is head of the economics department at Bank Hapoalim Ltd., said he is removing himself from consideration, according to a text message from Prime Minister’s office. The announcement did not give reason for his decision.

“This is a major embarrassment for Netanyahu, no doubt,” said Abraham Diskin, professor of political science at the Hebrew University of Jerusalem. “While the domestic political fallout will be limited, it will likely raise questions internationally about his handling of the economy.”

Netanyahu picked Leiderman to succeed Stanley Fischer on July 31 after Jacob Frenkel announced he was pulling out. In choosing Leiderman, Netanyahu passed over acting Governor Karnit Flug, who tendered her resignation in response to the announcement.

“Bank of Israel Governor nominee Leo Leiderman informed Prime Minister Benjamin Netanyahu and Finance Minister Yair Lapid a short time ago that he is withdrawing his candidacy,” the text message from the prime minister’s office said. Leiderman was scheduled to meet with a government vetting committee on Sunday.

Frenkel withdrew after the Haaretz newspaper reported that was allegedly detained in Hong Kong seven years ago after he left an airport shop with an item that had not been paid for.

Frenkel said the incident was a misunderstanding that was fully clarified without further consequence. He said he no longer wanted the job after being subjected to an “avalanche of abuse.”

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