Karnit Flug Named Governor of the Bank of Israel

Netanyahu and Lapid's announcement ends the embarrassing 112-day saga of scrabbling for somebody to replace Stanley Fischer. Flug will be the first woman to hold the position.

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Dr. Karnit Flug has been chosen as the Bank of Israel's next governor, after 112 days of the central bank being left leaderless. Prime Minister Benjamin Netanyahu and Finance Minister Yair Lapid announced the appointment on Sunday, making Flug the first female governor for Israel's central bank.

Flug has been the acting governor in since Dr. Stanley Fischer left on June 30. Before his departure, Fischer urged that Flug be named to the position.

Netanyahu had however opposed her appointment, and proposed former governor Jacob Frenkel for the job instead. But Frenkel dropped out of the running after disclosures that he had been detained at the Hong Kong airport, several years previously, on suspicion of shoplifting. Following that, the next head of the short-list, Prof. Leo Leiderman, also pulled out of the race, leaving Israel's top officials floundering for suitable candidates.

Flug's appointment brings an end to the embarrassing saga of months of efforts to find a replacement for Fischer, who announced his resignation in late January, effective six months later, at the end of June.

Her nomination remains contingent on cabinet approval. Assuming that is forthcoming, she will be formally installed as head of the Bank of Israel by President Shimon Peres.

Flug was born in Poland in 1955. She immigrated to Israel with her parents when she was three. She received her master's degree in economics in 1980 at the Hebrew University of Jerusalem,  and earned her doctorate in economics at Columbia University in 1985. A year before receiving her PhD she began working as an economist at the International Monetary Fund. In 1988, she returned to Israel and joined the Research Department of the Bank of Israel. While on leave from the central bank in the mid-90s she was employed as a senior research economist at the Inter-American Development Bank.

In 1997, she returned to the Bank of Israel as assistant director of the bank's research department. In 2001 she was appointed the department's director and became a member of the bank's senior management. She was appointed deputy governor in 2011.

Acting Bank of Israel Governor Karnit Flug with the bank's former chief, Stanley Fischer.Credit: Michal Fattal

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