After 2nd choice for Bank of Israel chief withdraws, PM short of options
Netanyahu said not to share economic philosophy of acting governor Karnit Flug; Leo Leiderman backed out Friday after spate of allegations against him
Prime Minister Benjamin Netanyahu and Finance Minister Yair Lapid were casting around desperately for a new governor of the Bank of Israel, after Bank Hapoalim economist Leo Leiderman, who was named Wednesday as the next Governor of the Bank of Israel, withdrew his candidacy on Friday.
Karnit Flug, the acting governor, was said Saturday night to be prepared to consider taking the job, even though she had announced her resignation on Wednesday when she was passed over for the post. But Netanyahu is widely said to disagree with Flug’s economic philosophy. Flug, a 25-year Bank of Israel veteran, was apparently the preference of the last governor, the well-regarded Stanley Fischer, who stepped down more than a month ago. She has also been strongly endorsed by opposition leader Shelly Yachimovich.
But Netanyahu ignored her first when choosing the former governor Jacob Frenkel for the post. And then, when Frenkel notified Netanyahu and Lapid Tuesday that he would not be taking over, he ignored her again in selecting Leiderman.
Other names mentioned Saturday for the post included various current and former major bank chiefs; National Economic Council head Eugene Kandel, a respected figure who was said to have made clear he did not want the job; Manuel Trajtenberg, who helped Netanyahu grapple with pressure for economic reforms at the height of social protests two years ago, and even the veteran lawyer and ex-minister Yaakov Neeman.
Leiderman informed Netanyahu and Lapid Friday that he wished to withdraw his candidacy, which was about to be vetted by an appointments panel, having discussed the matter with family members and decided he preferred to continue working in the private sector. He had previously indicated he would take the job.
Fischer announced in January that he would be stepping down, and Netanyahu and Lapid have been struggling ever since to find an appropriate successor, as Israel grapples with a series of difficult financial challenges.
According to Hebrew media reports, Leiderman’s turnaround was a consequence of anonymous complaints about him made to the office of former Supreme Court justice Jacob Turkel, head of the committee charged with vetting the appointment.
Army Radio reported Friday night that legal advisers told Leiderman he would likely be able to pass the vetting panel, but that the process “would not be pleasant.”
Following Leiderman’s withdrawal, opposition chief Yachimovich urged Netanyahu and Lapid to go to Flug’s house, apologize to her, and “implore her to take on the post.”
Leiderman, a longtime professor at Tel Aviv University, currently serves as the chief economist of Bank Hapoalim, and previously headed the Bank of Israel Research Department. He also served as director and head of the emerging markets economic division at Deutsche Bank in New York and London.
Leiderman’s short-lived appointment was necessitated after Frenkel withdrew his candidacy amid a scandal over alleged attempted shoplifting in a Hong Kong airport duty free store several years ago.
Frenkel said the shoplifting claim arose after a misunderstanding, and bitterly withdrew his candidacy Monday complaining over a media campaign of vilification.
The Times of Israel Community.