Fischer: Flug has leadership qualities
Former Bank of Israel governor lauds his long-awaited replacement, who served as his deputy: 'In recent years Karnit was a key factor in important decisions made at the Monetary Committee and Supervisory Council'
Former Bank of Israel Governor Stanley Fischer on Sunday rushed to praise the decision made by Prime Minister Benjamin Netanyahu and Finance Minister Yair Lapid to appoint Dr. Karnit Flug, who served as his deputy at the central bank, as the bank's new governor following a months-long saga.
"I know that it was not an easy decision," Fischer said, "but I also know that all along the prime minister and finance minister were looking for the best candidate for the economy.
"In the eight years I served as governor, I got to know and learned to appreciate Karnit, her judgment in regards to the state of the economy and her decisions about the monetary policy. I witnessed her leadership qualities, her level-headedness, the ability to manage people and processes, and the thorough professional dialogue she holds with governmental and economic figures."
Fischer added, "In recent years Karnit was a key factor in important decisions made at the Monetary Committee and Supervisory Council, which made her qualified to serve as a suitable governor, alongside her experience and familiarity with international economic bodies.
"I wish Karnit and the workers of the Bank of Israel a lot of success in dealing with the challenges facing the government the economy," Fischer concluded.
Capital market satisfied
Rafi Gozlan, chief economist at the IBI investment house, said Sunday's appointment "followed a puzzling procedure of about four months which did not benefit the prestige of the prime minister and finance minister."
According to Gozlan, "Flug's appointment was the necessary move a long time ago, considering her experience and the support she received from former Governor Stanley Fischer.
"The appointment will prevent shocks in the Bank of Israel and in the monetary policy, as Flug was a central part of the bank's policy during Fischer's term, both as director of the Research Department and as deputy governor.
Dr. Karnit Flug in her office after appointment (Photo: Ronen Sharabi, Bank of Israel)
"This is good news also in terms of the Monetary Committee, as this is the same makeup since the committee's establishment, even if the current members will be joined by two members on behalf of the bank whose identity will be revealed in the coming months.
"From the monetary policy aspect, as I said, this is a direct continuation of Fischer's policy – in other words, at this stage putting a greater emphasis on the export issue and the exchange rate rather than on housing. However, considering the current level of the interest rate, we are not expecting a change in the interest rate unless there is a significant deterioration in the global state of affairs."
Ramzi Gabbay, chairman of the Israel Export and International Cooperation Institute, said in response to the appointment that "the freeze in exports in the past year places complex challenges for the governor.
"Dr. Flug has already proved her abilities while serving as acting bank governor, and I am convinced she will continue working and dealing successfully with all missions, led by the further appreciation of the local currency against the foreign currencies, which threatens Israeli exports and the economy."
