Prime Minister Benjamin Netanyahu is pushing for the current head of the National Economic Council at the Prime Minister's Office, Prof. Eugene Kandel, to become the next Bank of Israel governor, following the withdrawal of Prof. Leo Leiderman.
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Leiderman on Friday withdrew his candidacy to succeed Stanley Fischer, only days after he was nominated for the post, amid allegations of sexual harassment that may have led to his departure from a job at Deutsche Bank a decade ago. Leiderman has declined to comment on the allegations.
Leiderman was tapped by Netanyahu and Finance Minister Yair Lapid after their first pick for governor, Jacob Frenkel, dropped out last week after an investigation was opened into alleged shoplifting at a Hong Kong airport in 2006.
Leiderman told Netanyahu and Lapid that after discussions with his family, he prefers to continue working as a private citizen at Tel Aviv University and Bank Hapoalim.
On Sunday, Leiderman was meant to appear before the Turkel Committee, the advisory committee on senior appointments. Leiderman’s appointment had been expected to pass smoothly.
Immediately following Leiderman’s withdrawal, at the top of the list of possible candidates for the job was Dr. Karnit Flug, who has been deputy governor of the Bank of Israel for more than three years and is now serving as interim governor. Flug was Fischer’s choice for his successor.
On Friday, several Knesset members called on Netanyahu and Lapid to choose Flug.
"The collection of strange and failed decisions made by Netanyahu and Lapid just to avoid appointing the most suitable woman for the job is beginning to appear like one big farce," said opposition leader and Labor MK Shelly Yacimovich. "This is the time to regain composure and do the right thing."
After Netanyahu and Lapid announced that Leiderman had been selected, Flug announced that she would resign from the Bank of Israel within a month.
Leiderman, 61, was born in Argentina and immigrated to Israel when he was 17. He was awarded a bachelor’s degree from Hebrew University and an MA and doctorate from the University of Chicago. He wrote his PhD thesis under the guidance of a Nobel Prize laureate Prof. Robert Lucas.
In the last 10 years, Leiderman has been Bank Hapoalim’s chief economist, covering both the domestic and world economies.
To fill the governor job now, Netanyahu and Lapid apparently prefer Kandel.
Kandel announced early on that he was not interested in replacing Fischer. He reiterated his refusal over the weekend, although he never explained why he prefers to remain as head of the National Economic Council. But since Frenkel and Leiderman withdrew their candidacies, Netanyahu has been putting pressure on Kandel.
Kandel was born in Moscow and received his PhD from the University of Chicago. He was previously chairman of the economics department at the Hebrew University and an associate professor at the university's business school and economics department.