New race: Who will lead Bank of Israel?
After Prof. Jacob Frenkel drops his bid to serve as central bank chief, two leading candidates remain in race: Dr. Karnit Flug, who has been serving as acting Bank of Israel governor since Stanley Fischer's departure, Prof. Leo Leiderman of Tel Aviv University
Prof. Jacob Frenkel's decision to drop his bid to serve as the governor of the Bank of Israel
reopens the race for the high-ranking position, which became available in early July following Prof. Stanley Fischer's departure.
The two leading candidates for the position at the moment are the acting governor, Dr. Karnit Flug, who has been replacing Fischer since he stepped down, and Leo Leiderman, a professor of economics at Tel Aviv University.
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Flug was born in Poland in 1955 and immigrated to Israel in 1958. She completed her master's degree in economics at the Hebrew University in Jerusalem and her PhD at Columbia University in New York.
In 1984 she began working as an economist at the International Monetary Fund. She returned to Israel in 1988 and joined the Bank of Israel's Research Department. In 2001 she was appointed director of the Research Department, and went on to become the Bank of Israel deputy governor in 2011.
During her years at the central bank, Flug served on a number of important committees, including the Brodet Committee on a multi-year defense budget and the Trajtenberg Committee for social and economic change, in which she served on the panel examining social services, which recommended the implementation of a compulsory education law from the age of three.
Flug's nomination received the support of former Bank of Israel Governor Stanley Fischer. In his first meeting with the press after announcing his decision to step down, Fischer said that the deputy Bank of Israel governor was the person who stood in for the governor when the governor was absent, and so he believed that appointing the deputy as the next governor would be the right thing to do, as long as the deputy was suitable for the position. He then noted that he saw Flug as suitable for the position.
Leo Leiderman is a professor of economics at Tel Aviv University who completed his PhD at the University of Chicago. He specializes in inflation targeting, exchange rate regimes, dollarization and capital inflows to emerging market economies. In the past, like Flug, Leiderman headed the Bank of Israel's Research Department.
Flug and Leiderman are considered the leading candidates due to their economic experience in general, and their experience in Israel's central bank in particular. Yet there is no guarantee that either of them will receive the position eventually.
It's quite possible that a new, unexpected candidate will emerge from nowhere, just like Prof. Frenkel's surprise nomination five weeks ago, which eventually failed due to past affairs.
