Stanley Fischer, a vice-chairman of Citigroup, has been nominated as the new governor of the Bank of Israel, marking the return of the highly respected former deputy head of the Inter-national Monetary Fund to the public sector.

Mr Fischer, who is Jewish and holds American citizenship, accepted the job after it was offered to him several weeks ago by Ariel Sharon, Israel's prime minister, and Benjamin Netanyahu, the finance minister. Mr Fischer's departure from Citigroup comes after a two-year tenure during which he co-ordinated the financial services group's country risk management unit and managed relations with government clients.