Taking Stock / First Impressions of Gov'

1. Hebrew. When the former Bank of Israel governor, David Klein, heard that his successor was to be Stanley Fischer, he breathed more easily.

It isn't that Klein didn't want another term, but if he had to go, he couldn't have hoped for a more distinguished successor. It would have been one thing to be replaced by Victor Medina, but it's something entirely different to be pushed out for an international star like Fischer.

Klein praised Fischer in public and private conversation from every aspect, raising just one concern: Hebrew.

We have good news: His Hebrew is excellent. Fischer is making tremendous efforts to learn the language. It is a principle for him, and he seems to be successful at it.

2. Why did he come? Fischer's friends in the U.S. laughed when they heard of Fischer's decision to take the job as governor of the Bank of Israel. Why would a man of his status want to become the central banker of a tiny backwater with a population of just six million people? Would he have accepted the position of central banker for say, West Virginia?

There can be only one answer to that riddle: Zionism. Fischer is a wandering Jew who spent his entire life fulfilling top international jobs around the globe, but he evidently nurtured a strong tie with Israel. Nothing else could explain why he'd leave his lofty position at Citigroup in New York to come here.

3. Chagrin at the banks: About half a year ago, Israel's bankers managed to sell a theory to the IMF, that there's no need to intervene in Israel's capital market or to oust them from that arena.

Fischer had spent much of his career at the IMF, and the bankers had hoped his arrival would mark a turning point in the looming reform - in their favor, that is.

No such luck. Fischer has had many a difference of opinion with the IMF, both when he worked there and now as well. The fund's positions don't interest him at all: he fully and wholeheartedly believes in the goals and means of the Bachar reform.

4. Continuity at the Bank of Israel: The arrival of an American economist at the Bank of Israel could portend great change in concepts and attitudes. But if you've been listening to Fischer in the last few days, you will see many parallels to his predecessors, Klein and Jacob Frenkel. You could see it as conceptual uniformity among central bankers worldwide, or view it as a natural consequence of globalization and the development of economic research around the world. But what is sure is that the Bank of Israel will remain consistent in most of its macro- and micro-economics.

5. Optimism: Stanley Fischer is optimistic about Israel's economy. That's understandable: if he hadn't been optimistic, he probably wouldn't have come. Netanyahu's vision of rapid growth enriching us all doesn't make Fischer giggle, nor does the idea of Israel joining the OECD during his term seem off the wall.

6. Relations with the Finance Ministry: Fischer and Netanyahu share many opinions. There is a good chance they will cooperate, not only via the usual central bank-treasury haggling, but also when it comes to genuine ideology.

They will also have differences of opinion, which will naturally become sharper with the approach of elections, and which usually cause the finance minister to deviate from clear economic logic. But Netanyahu will have a tough time confronting Fischer due to the latter's standing. Netanyahu will have to learn to show respect to the governor, something Israel's finance ministers have found enormously difficult to do over the years.

7. Public relations: Fischer seems like the kind uncle from the United States, a smiling, quiet sort of man. But make no mistake. He's a political animal, as wily as they come. He's no stranger to public relations and the press. He's more like Frenkel than Klein, though his exterior may seem more Kleinesque.

At his first meeting with Israel's business reporters, he said that Israel's economic commentary in the press is better than in the United States. That's a good way to start his relationship with the media.