Bank of Israel Governor Stanley Fischer declined on Thursday to declare himself a candidate to succeed his former pupil, Ben Bernanke, as U.S. Federal Reserve chairman.
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“When I first entered the job market, a professor said to us ‘never accept a job offer that you haven’t been given.’ I haven’t been given any job offer. I’m not about to accept it. I’m certainly not about to reject it because it doesn’t exist,” he said in an interview with Bloomberg Television. “No, I don’t want to retire. I won’t retire. We’ll see what happens next.”
Fischer is due to step down after eight years at the helm of Israel’s central bank, citing personal reasons for his decision to end his second term as governor two years early.
Bernanke was one of a celebrated list of graduate students Fischer advised when he was on the faculty of the Massachusetts Institute of Technology. They went on top jobs in the policy world, including European Central Bank President Mario Draghi and former chief White House economist Greg Mankiw.
At a question-and-answer session with Ester Levanon, CEO of the Tel Aviv Stock Exchange, at the Israel Opportunity 2013 conference in London on Thursday, Fischer talked about the challenges he faced as Bank of Israel governor.
Born in Zambia and a U.S. citizen, he had helped Israel with key economic policy decisions previously but was a newly minted citizen when he arrived at the bank. Fischer said he was vacationing on a Caribbean beach when he received a call offering him the post of governor but said he was keen to accept it.
“I grew up in Habonim in central Africa and I always wanted to contribute something to Israel, and this is not an offer you get every day. You get it once in a lifetime,” he recalled.
When Fischer took over as governor in 2005, he held what he said was the contrarian view that the Israeli economy enjoyed underlying strength. But since then, Fischer said, investors and others have come around to his point of view, partly because Israel’s image has been enhanced by joining the Organization for Economic Cooperation and Development, a club of the world’s most developed economies.
‘Very robust economy’
“I think it is a very strong, very robust economy,” he said. “It was very clear in 2005 that that was case. It’s been through a lot of experiences since then. It went through a real stress test during the global financial crisis and came through it very, very well.”
Thought internal labor strife undermined respect for Bank of Israel as institution. He sought to settle those quickly and reform its structure through a new Bank of Israel law.
“In Israel it’s very hard not to get drawn into every political and economic issue that comes along,” he said, “because the public is insatiable in its demand for knowledge of what is happening, and the press is even more insatiable about nagging you to say something that you don’t want to say anything about. Frequently you end up saying something and then you wish you hadn’t.”
In his final remarks to the Knesset Finance Committee last month, Fischer urged Israeli leaders to seriously pursue a peace agreement with the Palestinians. But the governor said on Thursday that he had tried to avoid stating private views on non-economic issues, but added that “it’s hard to resist.”
On current issues, Fischer expressed mild satisfaction with his efforts to stem the strengthening of the shekel against the dollar. The Israeli currency weakened considerably after Fischer cut interest rates twice in May and announced a program to buy foreign currency, but some of the dollar’s gains have since eroded and Thursday it lose 0.3% to a Bank of Israel rate of NIS 3.6150.
“We haven’t gone back to where we were before. What we’ve had is a fair amount of volatility, which is, of course, related to what’s going on at the Fed and how the markets are reacting to that,” he told Bloomberg Television.
“Our impression is that we’ve sort of reached a new, more stable level. It’s not quite at the level that we think is the equilibrium rate. We think there is still somewhat of an appreciation of the shekel relative to where we would have expected it to be over the longer term. But we at least see at the moment that it is fluctuating, not moving in only one direction.”