Bank of Israel Chief Resigns Two Years Ahead of Schedule

Bank of Israel Governor Stanley Fischer to step down at end of June, two years before his term was supposed to end • Prime Minister Benjamin Netanyahu thanks Fischer for his service, calling him “an economic ambassador for the State of Israel.”Photo credit: Amos Ben Gershom / GPO

Bank of Israel Chief Resigns Two Years Ahead of Schedule

Despite the platitudes, is this a possible protest statement against Israeli Prime Minister Benjamin Netanyahu’s recent re-election? Or is something more global underway here?

Bank of Israel Chief Stanley Fischer to Leave Post This Summer

By Zeev Klein and Israel Hayom Staff, Israel Hayom – January 29, 2013

http://www.israelhayom.com/site/newsletter_article.php?id=7223

Bank of Israel Governor Stanley Fischer will be leaving his post at the end of June, two years before his term was supposed to end. Fischer informed Prime Minister Benjamin Netanyahu of his decision on Tuesday, Fischer has led the Bank of Israel for the past eight years.

Also, from CNN:

Fischer attributed his surprising decision to a feeling of exhaustion. He was set to address the media on Wednesday. Fischer’s desire to be closer to family members who live in the U.S. may have played a role in the decision.

Last August, rumors circulated that Fischer was set to retire, rumors which he did not outright deny.

It is unclear what Fischer’s future plans are but in the past his name was been mentioned as a possible finance minister or even president.

Netanyahu thanked Fischer, calling him “a responsible adult and an economic ambassador for the State of Israel.”

“Eight years ago, I told you that this is a difficult and challenging job but that you could do great things for the Israeli economy,” Netanyahu said to Fischer.

“Today you believe me. I think we all see that you made a unique contribution to the Israeli economy, not only in terms of things that were done at the Bank of Israel, but also in the way you opened doors and represented the Israeli economy in the word. You have a standing reserve duty order. You’ll still be called on and required to help us. We can’t let you go.”

Fischer thanked Netanyahu and said that he would continue to be fully engaged in his job in the coming months, allowing the government to conduct an orderly process of finding a replacement for him.

“I’m grateful for the opportunity the Israeli government gave me to be the governor of the Bank of Israel during a challenging period of global economic crisis,” Fischer said.

Fischer guided the Bank of Israel throughout the economic crisis that erupted in the world in 2008. He lowered the interest rate and inflation to historic lows, increased foreign reserves to a record $80 billion and preserved the stability of Israel’s finance and banking systems. Under Fischer, no Israeli banks have closed, even as more than 1,000 banks shut down in the U.S. and U.K., and Israel’s credit rating was upgraded to A+.

The markets reacted to the news of Fischer’s upcoming departure in a restrained manner. The leading indicators in the Israeli stock market fell between 0.9% and 1.3% on Tuesday. The dollar rose slightly to equal 3.73 shekels before falling back to 3.727 shekels.

Finance Minister Yuval Steinitz thanked Fischer for what he called close and fruitful cooperation.

“I thank him especially for his important work in Israel being accepted into the OECD and for his crucial public support in facing domestic and international pressure during the time the Sheshinski Committee was active,” Steinitz said. “Stanley became not only an asset to Israel’s economy, but also to Israel’s international image, thanks to his status and connections in the world.”

Defense Minister Ehud Barak said that “Israel is about to part from an exceptional economic leader who made an immense contribution to strengthening the economy and Israel’s international standing.”

MK Moshe Gafni (United Torah Judaism), chairman of the Knesset Finance Committee, expressed regret over Fischer’s decision, noting that Fischer’s “contribution the Israeli economy was enormous. We cooperated closely even on issues on which we disagreed. We worked with mutual respect.”

Labor Chairwoman Shelly Yachimovich claimed that Fischer’s decision marked a “ringing slap to the face of the prime minister’s economic policies. His resignation, in light of the fact that there is no fundamental ideological divide between him and Netanyahu, sends an alarming message to Israeli citizens, as [Fischer] signalled that he is not ready to be part of the economic chaos and social hell that will prevail in Israel after the establishment of the new government.”

Netanyahu associates called Yachimovich’s claims “ridiculous,” saying the fact Fischer will leave his post only this coming summer means that he will take part in formulating the 2013 budget.

“Fischer, who doesn’t owe anything to anyone, decided on his own to face the cameras and say that he supports the government’s economic policies,” they said. “Anyone who says otherwise is probably doing so for political reasons.”

Fischer’s departure comes at a delicate time for Netanyahu as preparations are underway for formulating an austerity budget. But it is also an opportunity for Netanyahu to appoint “his guy” to the most important economic role in Israel.

Fischer, 69, is one of the most renowned economic leaders in the world. He has annually received an A rating on the Central Banker Report Card in recent years and is considered by the global economic press to be one of the world’s top central bankers.

In the past, Fischer served in high-level roles at the World Bank, International Monetary Fund and Citigroup. He became the head of the Bank of Israel in 2005.