What Makes Stanley Run?

Yoav Lehman's resignation surprised nobody. It had been an open secret that Lehman, the Supervisor of Banks and the governor of the Bank of Israel, Stanley Fischer, did not see eye to eye on the boundaries of his job. It was only to save his dignity that the central bank let him resign, rather than toss him out on his ear.

Even if you weren't privy to whispers in banking circles, the writing was on the wall: Fischer never once stood beside his banks supervisor as he fended off attacks from all directions in recent months.

For instance, when debate raged in the Knesset and the press over banking fees, the governor stayed mum. His silence was all the more glaring given that the antitrust commissioner - who had no business being involved in the issue at all - spent hours and days discussing the matter at the Knesset.

Nor was Fischer evident when Lehman fought to institute caps on overdrafts at the banks, to stop the banks from gouging their customers by granting excess credit for exorbitant interest rates.

Fischer stayed invisible even when the octaves rose high enough to imperil the very Bank of Israel, in the form of a legislative proposal that would have given the Knesset the right to meddle in Supervisor of Banks decisions. The governor left Lehman alone in the bloody public battle, which pitched him against belligerent, populist Knesset members, who were poised to torpedo the important reform Lehman instituted in overdrafts.

His battle over overdrafts was the highlight of Lehman's career. Ruining the reform would have seriously eroded his status, yet judging by Fischer's thunderous silence, one has to wonder if he cared.

On the contrary: it seems that Fischer took issue with Lehman's priorities. If we correctly interpret his silence, regulating risk management at the banks according to the principles of Basel II is far more important than regulating overdrafts and bank fees for the good of consumers. And that evidently served as sufficient reason for Fischer to abandon his watchdog, leaving him yelping on his own.

Or maybe we have misinterpreted Fischer's silence. It wouldn't be our only mistake. A year and a quarter after his appointment as the central bank governor, Fischer can list several major achievements vis a vis his influence on governmental economic decisions. His present stand against increasing the budget deficit to more than 2.5% could well induce the government to preserve the framework of the 2007 budget.

Fischer can also mark achievements in improving Israel's economic status in the world. But when it comes to sensitive issues in the Israeli public sphere, he cannot boast much success.

When it comes to the Israeli public sphere, he simply is not there. He doesn't speak out. He doesn't fight. Consumer issues interest him not at all. In fact, other than macroeconomics, nothing seems to grab his interest, except for that burning issue of protecting the excessive rights of the Bank of Israel workers and their scandalous employment terms.  That was the only public battle in which Fischer engaged. It was the wrong battle to choose.