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Karnit Flug named as first female Bank of Israel head
Four months of uncertainty ended yesterday as Karnit Flug was named as the new governor of the Bank of Israel. She succeeds Stanley Fischer who stood down in June following a successful eight-year tenure.
58-year-old Flug was Fischer’s long-term deputy and acting Bank of Israel chief since Fischer stepped down in June. In a joint announcement yesterday, Prime Minister Benjamin Netanyahu and Finance Minister Yair Lapid said “We have been impressed by Dr Flug’s performance as acting governor in recent months, and we are certain that she will continue to assist us in moving the Israeli economy to additional achievements in the face of the global economic upheaval.”
The announcement comes after both Jacob Frenkel and then Leo Leiderman opted in recent months not to pursue their candidacies to head the bank, having initially accepted the nomination of Netanyahu and Lapid. Frenkel accused the media of a smear campaign against him after revelations that he had failed to disclose that he had been detained at Hong Kong airport in 2006 over suspicions of shoplifting. Leiderman was subsequently nominated bit withdrew his candidacy to avoid the “nightmare” of public and media scrutiny.
As a result, the entire appointment process came under scrutiny from political leaders. In particular, some had suggested that Netanyahu and Lapid overlooked Flug’s candidacy due to sexism and three alternative candidates, including former Argentinian central bank president Mario Blejer had been considered the front-runners before this weekend. Leader of the opposition and Labour Party head Shelly Yachimovich commented yesterday, “Although the appointment process was flawed and at times ludicrous, Netanyahu ultimately recognised and amended his mistake”
Flug completed her doctorate at Columbia University and worked at the International Monetary Fund and later as a senior research economist at the Inter-American Development Bank. She has been at the Bank of Israel since 1988. Flug has already demonstrated her mettle since Fisher’s departure, twice lowering interest rates.