New runner for BOI chair an old hand at central banking

New runner for BOI chair an old hand at central banking

Mario Blejer helped steer Argentina through one of its greatest economic crises, and aided the former Soviet Union in dealing with the fiscal implications of its breakup

Mario Blejer (photo credit: Screenshot)
Mario Blejer (photo credit: Screenshot)

Professor Mario Blejer, the former governor of Argentina’s central bank, is now reportedly the leading candidate for the chairmanship of the Bank of Israel, after previous front-runners Jacob Frenkel and Leo Leiderman withdrew. Blejer, 65, ran Argentina’s central bank in 2002 as an economic crisis was rampant in the country. He resigned six months later over a dispute with the country’s finance minister on stabilizing the economy.

Blejer was born in Cordoba, Argentina, in 1948, and studied at The Hebrew University, earning bachelor’s and master’s degrees in economics and Jewish history. He obtained a Ph.D. at the University of Chicago in 1975, and later taught at Boston University.

In 1980, Blejer joined the International Monetary Fund as a consultant, advising the bank on exchange rates and monetary policy, and stayed with the IMF for a total of 21 years. In 1992, he was appointed as the senior European and Central Asian policy adviser of the World Bank, and helped the soon-to-be former Soviet Union — which was falling apart — to weather its breakup financially. He also taught at the Central European University in Budapest, from 1996 to 2000.

In 2002, he was tapped for the job of Argentina’s central bank leader, after having been appointed six months earlier as vice president of the bank. During the crisis, Argentina defaulted on its international debts; inflation and unemployment were rampant; and rioting threatened to destabilize the country. Blejer resigned after six months due to a dispute with Argentina’s finance minister over raising the limit that account holders could withdraw from their bank accounts, and over a plan — eventually adopted — to link Argentina’s peso to the US dollar.

When Argentina again faced a financial crisis in the wake of the 2008 world economic crisis, President Cristina Kirchner asked Blejer to take on the job of central bank chief again, and fired then-president Martin Redrado. Redrado, however, refused to leave office, and an Argentinian court said that the president could not fire him. Blejer removed himself as a candidate for the post.

Between 2004 and 2007, Blejer was the director of the Bank of England’s Centre for Central Banking Studies.

Blejer arrived in Israel on Friday, and is expected to appear before the Turkel Committee — which is vetting candidates for the post of Bank of Israel chairman — later this week.

Blejer is the third candidate chosen by Prime Minister Benjamin Netanyahu and Finance Minister Yair Lapid for the post. The first, Frenkel, removed himself as a candidate after it was revealed that he was held for shoplifting in Hong Kong’s airport eight years ago.

The second contender, Bank Hapoalim chief economist Leiderman, decided — within hours of agreeing to take it on — that he did not want the job. Leiderman’s advisers told him that he was likely to face the same kind of media treatment that Frankel had received.

Reports in the Hebrew media said that anonymous parties had filed complaints against Leiderman with the office of former Supreme Court justice Jacob Turkel; the nature of the complaints was not revealed. A report on Israel Radio Sunday said that Leiderman had done work with the Deutsche Bank and had signed a nondisclosure agreement, which — he was told — he would have to violate if a vetting committee demanded to know about his activities there.

In an interview with Army Radio Sunday morning, Eliana Teitelbaum, Blejer’s daughter, said she expected her father to easily pass the vetting process; she claimed there are no “skeletons in his closet” that could impede his approval for the job.

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