Former Bank of Israel Governor Stanley Fischer announced on January 29 that he was would be leaving his post at the end of June. During the ensuing five months, Prime Minister Benjamin Netanyahu, the person responsible for naming a new governor, could not come up with a single worthy candidate to fill Fischer’s admittedly big shoes.
Even if the delay can be explained by the desire to find the best possible person for the job, what has happened since Fischer departed can only be described as an ongoing farce. One candidate, Jacob Frenkel, withdrew his candidacy after an embarrassing episode from his past was brought to light by Haaretz’s Amir Oren, while another candidate, Leo Leiderman, withdrew his candidacy for unknown reasons only a few hours after his nomination was announced. At one point it seemed that the exhausting effort to choose a governor would finally conclude “after the holidays,” which is when Netanyahu promised to decide between the current batch of candidates – Zvi Eckstein, Mario Blejer and Victor Medina. Now it emerges that the premier doesn’t consider any of them suitable and, according to this newspaper’s Moti Bassok, he plans to continue the search after he frees up from his current diplomatic dealings.
Karnit Flug has been serving as acting governor all this time, but she’s itching to leave after being passed over for the top spot. Meanwhile, the Israeli economy is facing numerous threats, such as the weakening of the dollar against the shekel, which hurts exporters, the worsening housing crisis, amid warnings of a possible mortgage meltdown, and a further slowdown in growth, as evidenced in recent Central Bureau of Statistics forecasts. These threats require monetary responses that are the central bank governor’s responsibility. As a result of the foot-dragging, the next governor will not have a hundred days of a grace; he will be required to hit the ground running, with creative solutions to the many economic problems on the table. He will be facing these challenges with a depleted arsenal, since the route of manipulating interest rates and making huge foreign currency purchases has been basically exhausted.
Netanyahu is not to blame for all the economy’s problems, but the puzzling procrastination in choosing a new governor raises questions about his decision-making processes. Netanyahu must end this saga once and for all and find a worthy candidate to lead the Bank of Israel. If he feels that, between the Iranian nuclear program and talks with the Palestinians, his hands are too full now, he must delegate the search and the decision to others.
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