© The Financial Times Ltd 2015 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
January 30, 2013 7:49 pm
Stanley Fischer has said his decision to quit as head of Israel’s central bank was mainly due to personal reasons – not differences with Benjamin Netanyahu, the prime minister – and that he does not have another job lined up.
Speaking to reporters on Wednesday for the first time since announcing his plan to resign in June, two years before the end of his five-year term, Mr Fischer also dismissed concerns that his departure might hurt investor confidence.
“I believe the central bank is set up in such a way that will enable it to continue to handle the monetary and central banking side of the economy in the same way we have managed it in the last eight years,” he said.
There were “several very good candidates” to succeed him. He now planned to divide his time between Israel – where he said he wanted to remain involved in public life – and the US, where his family lived.
In eight years as Israel’s central bank governor, the 69-year-old economist, banker and former professor has become a symbol of economic stability and policy continuity in a region rife with political risk.
Mr Fischer is the best-known international professional in the country’s government elite at a time when Israel’s policies in the occupied Palestinian territories are isolating it diplomatically.
The central banker’s announcement came shortly after the country sold $2bn worth of 30-year bonds and 10-year securities at its lowest-ever interest rate.
“Anyone who bought bonds yesterday thinking that the governor of the Bank of Israel will be here for the next 10 years was not well-informed,” said Mr Fischer, rejecting the notion that confidence in Israel’s economy was reliant on a “Fischer effect”.
Israeli commentators expressed concern that the national economy was losing its “responsible adult”. Business media speculated that Mr Fischer’s departure had to do with differences over economic or foreign policy with the prime minister.
Mr Fischer dismissed the reports. “I’m leaving mainly for personal reasons,” he said. “Eight years is a very long time. Also, I think most of the things I want to do have been done, with the help of others.”
Stocks traded slightly lower on the Tel Aviv exchange on Wednesday, but analysts said this had more to do with reports of an Israeli air strike on the Syria-Lebanon border than with Mr Fischer’s announced departure.
“Fischer, during many years in his position, changed a lot of the methods and how things work in the Bank of Israel,” said Amir Kahanovich, chief economist at Clal Finance in Tel Aviv. “I think that what is more important in Israel these days is the new government.”
Shimon Peres, Israel’s president, is expected later this week to ask Mr Netanyahu to form a new government that economists say will need to cut spending heavily to close a fiscal deficit that exceeded $10bn last year.
Copyright The Financial Times Limited 2015. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.
Sign up for email briefings to stay up to date on topics you are interested in