Twice Burned, Netanyahu May Change Process of Appointing Bank of Israel Chief

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Prime Minister Benjamin Netanyahu is considering a reform to the appointment process for the Bank of Israel governor after two nominees backed down last week, one by one, to succeed Stanley Fischer.

Prof. Leo Leiderman on Friday withdrew his candidacy, 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 was tapped by Netanyahu and Finance Minister Yair Lapid after their first pick, Jacob Frenkel, dropped out last week due to shoplifting allegations at a Hong Kong airport in 2006.

Netanyahu is currently considering to request the Turkel Committee, an advisory committee on senior appointments headed by retired Supreme Court Justice Jacob Turkel, approve a change of method for the nomination and appointment of Bank of Israel governor. He believes such a change is necessary after both Frenkel and Leideman withdraw their candidacy.

Netanyahu intends to propose that the prime minister and finance minister would choose a number of candidates, who would then fill in the Committee's standard forms. The Committee would publish the candidates' names so that the public could submit its reservations. Only after the candidates are cleared by the Committee will the prime minister, along with the finance minister, decide who to appoint.

Still, it is doubtful whether the Turkel Committee will accept Netanyahu's reform. It is also unclear whether the candidates themselves will agree to fill the forms without being guaranteed the job.

Dr. Karnit Flug, who has been deputy governor of the Bank of Israel, was Fischer’s choice for the post. After Netanyahu and Lapid announced that Liederman was tapped for the job, Flug, who is now serving as interim governor, announced she would resign.

Stanley Fischer with Benjamin Netanyahu. Credit: Emil Salman