Bank of Israel head to step down after first term
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Bank of Israel head to step down after first term

Karnit Flug informs Netanyahu she won't seek a second term, hails bank's contribution to the 'prosperity of Israel' and its citizens

Bank of Israel Governor Karnit Flug at a press conference in Jerusalem on March 28, 2018. (Hadas Parush/Flash90)
Bank of Israel Governor Karnit Flug at a press conference in Jerusalem on March 28, 2018. (Hadas Parush/Flash90)

Bank of Israel Governor Karnit Flug will step down in November after five years, and not seek a second term, the bank announced Friday.

Flug spoke with Prime Minister Benjamin Netanyahu on Thursday, the Bank of Israel said in a statement, informing him she will not be a candidate for a second stint as governor of the central bank. The bank said she would continue to perform all her duties as head of the bank until her tenure ends on November 12.

“I was privileged to head an organization of the highest quality, which works with professionalism, dedication and loyalty, and that on a daily basis lives up to the vision it set for itself — to be among the most advanced central banks and to contribute to the prosperity of Israel and the welfare of its citizens,” she wrote to Netanyahu.

“I can already say that I will end my tenure with a feeling of great satisfaction, as the Bank of Israel has a marked role in the robust state and the stability displayed by Israel’s economy in recent years, as well as in the analysis and the promotion of discussion regarding the considerable challenges we will face in the coming years,” Flug added.

Netanyahu in a statement thanked Flug — the first women to lead the bank — for her “devoted service” and “contribution to Israel’s economy.”

Prime Minister Benjamin Netanyahu receives a copy of the Bank of Israel’s annual report for 2015 from Bank Governor Karnit Flug at the Prime Minister’s Office in Jerusalem, April 3, 2016. (Kobi Gideon/GPO)

Flug said in April she was undecided on whether to run for a second term, after Finance Minister Moshe Kahlon said a search for a new governor would soon begin.

The Finance Ministry comments came after the Bank of Israel released a report that was critical of the finance minister’s flagship housing project, which subsidizes homes for qualified buyers. Flug has also clashed with Kahlon a number of times on his bid to cut taxes for citizens, saying the government should spend surplus tax revenues on infrastructure, education and improving social services instead

Flug, who has been in office since 2013, replaced Stanley Fischer who went on to become a — now former — US Federal Reserve vice chairman.

Neither Netanyahu or Kahlon have publicly named a preferred candidate to succeed Flug, nor has the Bank of Israel head recommend a preferred choice of successor. Flug was recommended for the post by Fischer, but was initially passed over in favor of other nominees before being chosen.

Flug, 63, who has a doctorate in economics from Columbia University, had previously served as a deputy governor of the Bank of Israel and before that held various positions at the bank and at the International Monetary Fund.

Shoshanna Solomon contributed to this report.

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