Bank of Israel Governor Stanley Fischer was ruled out as a candidate to head the International Monetary Fund yesterday. The IMF board declined to change rules requiring that managing director be younger than 65 on taking office. Fischer is 67.
The decision is surely a blow to the governor, who thought his character, expertise and standing in the international financial community, and the support he attracted, would suffice to have the rules changed.
"I have no regrets for having submitted my candidacy," Fischer stated following his disqualification, adding: "I will proudly and happily continue in my role as Governor of the Bank of Israel... I would like to thank the prime minister and finance minister for their unconditional support when I decided to submit my candidacy, and for their expressed hope that I will continue to serve as the Governor of the Bank of Israel - as I shall happily do."
The IMF acted as expected in declining to change the age restriction. So why would Fischer submit his candidacy last Friday, just before the deadline, knowing his chances were slim - because of his age and because the custom had been that the IMF head would be a European?
The thinking is that he was encouraged to do so by very senior American associates who saw potential problems inherent in the other candidates (French Economic Affairs Minister Christine Lagarde and Mexican central banker, Agustin Carstens ).
Fischer is known for his cautious, smart and sophisticated nature. People who know him well think he knew he wouldn't get the job: but he saw his candidacy as a win-win situation.
When Fischer announced that he was competing for the IMF post, he was in effect telling Benjamin Netanyahu, Finance Minister Yuval Steinitz, the Israeli public and, especially, the leaders of the world's developed economies, that he was through as governor of the Bank of Israel. From now on, he would be available as a candidate for other leading international economic positions, preferably in the U.S. If he got the IMF job, so much the better. If not, he would continue to serve as Bank of Israel governor for another month, six months, a year, until he got an interesting offer.
In about a year, Robert Zoellick, the American Republican, will conclude his term as president of the World Bank. That job carries no age restrictions, and Fischer had been mentioned for the post in 2007, but his chances at the time were said to be slim since he was identified with the Democrats.
Within the coming year, U.S. President Barack Obama will decide on a candidate for next World Bank president. While the post of IMF chief has traditionally been reserved for a European, the World Bank presidency is reserved for an American. Fischer has American citizenship and, if he is nominated for the job, it would be as America's candidate, not Israel's.
Commenting yesterday, Gad Suan - the head of the Israeli Association of Stock-Exchange Listed Public Companies - said: "From a personal standpoint, I regret Fischer wasn't selected, since he was absolutely a suitable candidate as IMF chief. At the same time, it's the Israeli economy's gain. By virtue of his personal stature and the prestige he built over the years, Israel in general and the Bank of Israel in particular benefit from his exceptional stature among economic institutions around the world."
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