Top Israeli Banker's Diary Shows Few Meetings With Netanyahu, Kahlon

Powwows with prime minister and finance minister occurred less than once a month during the year through October 2016, records show.

Prime Minister Benjamin Netanyahu accepting the Bank of Israel report for 2015 from Governor Karnit Flug in April 2016.
Kobi Gideon/GPO

Bank of Israel Governor Karnit Flug meets far less frequently with Prime Minister Benjamin Netanyahu and Finance Minister Moshe Kahlon than her predecessor did, even though one of her roles is to act as economic adviser to the government.

A record of Flug’s meetings – obtained by Hatzlaha, the Consumers’ Movement for the Promotion of a Fair Society and Economy – showed that she met one-on-one with Netanyahu and Kahlon less than once a month in the year through October 2016.

The one-on-ones don’t fully encompass contacts between Israel’s three top economic policy makers, since the governor also met with them at cabinet meetings and other times when there were multiple participants. Nevertheless, the appointments record supports the widespread assumption in economic circles that working relations between Flug and the premier and finance minister are not as good as those with the bank’s previous governors.

Stanley Fischer, who was governor of the Bank of Israel from 2005 to 2013, met with the prime and finance ministers almost weekly. Although Flug was Fischer’s choice to succeed him, Netanyahu sought several other candidates for the post and only agreed to appoint Flug when no alternatives emerged. Meanwhile, Flug and Kahlon have disagreed on key issues such as banking reform and ways to rein in soaring home prices.

Flug does not generally meet with MKs, with the exception of the chairman of the Knesset Finance Committee, MK Moshe Gafni (United Torah Judaism). But in the year covered by the diary (to which Hatzlaha was granted access after a request based on the Freedom of Information Law), Flug met with Chief of Staff Lt. Gen. Gadi Eisenkot last May, and also with senior TV news journalists Dana Weiss and Ilana Dayan.

In fact, Flug often meets with journalists – most of them financial reporters from the print media, including four meetings with one journalist alone – for background chats. Among the TV broadcasters, Flug met with journalists from Channel 2 more than anyone else.

Last year, Flug met twice with the head of the budget division in the Defense Ministry, Brig. Gen. Sasson Haddad, but not once with the head of the treasury’s own budget division, Amir Levy. Flug held frequent meetings with the director general of the treasury, Shai Babad, usually in connection with joint committees of the treasury and Bank of Israel. She also met four times with the treasury’s accountant general, Michal Abadi-Boiangiu.

Flug also met with Maj. Gen. Yoav Mordechai, the coordinator of government activities in the territories, and Home Front Command chief Maj. Gen. Yoel Strick. She also held two meetings with the then-governor of the Palestinian Monetary Authority, Jihad al-Wazir, and toured the new Palestinian city of Rawabi, which is adjacent to Ramallah.

Flug held many work meetings with the heads of Bank Leumi, CEO Rakefet Russak-Aminoach and Chairman David Brodet, but fewer with their counterparts in Bank Hapoalim (Zion Kenan and Yair Seroussi). She held one meeting with the heads of the First International Bank of Israel, but none with the other big banks.

Flug met with U.S. economist Prof. Nouriel Roubini, one of the few who predicted the global financial crisis of 2008, and with OECD Secretary-General Angel Gurria.

She also met with senior officials in the major international credit rating agencies and the International Monetary Fund. She met once with Histadrut labor federation Chairman Avi Nissenkorn in 2016, and once with Shraga Brosh, president of the Israel Manufacturers Association.