Wharton Professor Amir Yaron Tapped as Next Bank of Israel Governor

Yaron, a finance professor at The Wharton School of the University of Pennsylvania who has spent more than 20 years in the United States, is slated to succeed Karnit Flug in November

Hagai Amit
Hagai Amit
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Prof. Amir Yaron
Prof. Amir Yaron.Credit: Wharton School of Business
Hagai Amit
Hagai Amit

Proferssor Amir Yaron of the Wharton School of the University of Pennsylvania was tapped as the next Bank of Israel governor. Prime Minister Benjamin Netanyahu and Finance Minister Moshe Kahlon announced their selection of Yaron on Tuesday afternoon.

Yaron holds Israeli and American citizenship, according to his resume, and has specialized as an academic in the study of asset pricing, risk-return strategies, macroeconomics, investments and finance.

Born in Israel in 1964, he grew up in the Tel Aviv suburbs of Ramat Hasharon and Ramat Gan. He earned a B.A. and M.A. from Tel Aviv University followed by an M.A. and Ph.D. from the University of Chicago. He has lived in the United States for more than 20 years. He is known for his work with Prof. Ravi Bansal of the Duke School of Business in developing a model for pricing investment assets in light of long-term risks.

Yaron does not have considerable experience in central banking, but has worked this year as a visiting academic at the Federal Reserve Bank in Philadelphia. Unlike some of the other potential candidates as Bank of Israel governor, he is free of ties with business figures in Israel. He is a member of the board of the Dovrat Economic Policy Center at the Interdisciplinary Center in Herzliya.

He is slated to succeed Karnit Flug, who announced in July that she would not seek a second term when her current five-year stint ends on November 12. Flug's decision followed a high-profile flareup with Finance Minister Kahlon earlier in the year over government fiscal and housing policy.

Yaron's nomination requires the approval from the committee that vets senior public service appointments and will then also require cabinet approval. His appointment would then be made official by President Reuven Rivlin.

Netanyahu wished to have an economist of international stature appointed to the post and has sought out leading economists in Israel and abroad for the post in a process that was coordinated by the head of the National Economic Council, Avi Simhon.

Prior to Flug's appointment in 2013, the search for a celebrity governor failed miserably. Several big names turned down the offer. Jacob Frenkel, who had headed the Bank of Israel in the 1990s, was willing until reports emerged of shoplifting charges dating from years before (Hong Kong authorities later dropped the charges on allegations that Frenkel had denied). Leo Lederman, Bank Hapoalim’s chief economist, withdrew, reportedly after Channel 10 News revealed he consulted with an astrologer.

In the end, the job was given to Flug after she had held the post on an interim basis for fourth months.

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