In an interview with "Bloomberg" on Friday, Governor of the Bank of Israel Prof. Stanley Fischer warns that despite encouraging signs in the global economic recovery over the last several weeks, the situation is still tenuous. “It’s important that we keep asking what can go wrong next, because something will go wrong somewhere, sometime and it’s important to try to anticipate where and what it might be,” Fischer said.
Fischer, who is called, "Mentor of Central Bankers" in the "Bloomberg" article, says, “There remains the problem of restoring European growth, which hasn’t been dealt with yet and it’s very hard to see how to deal with it.”
Despite the fact that, according to Fischer, “The U.S. economy is looking much better” and it is quite clear that Bernanke has been a success, Fischer says, “I’m interested in why the Fed’s forecasts appear to be more cautious than those of most private forecasters. Bernanke’s pledge to hold the benchmark federal funds rate close to zero at least through late 2014 was a pretty brave and pretty strong step.”
Fischer says, "Greece is facing a very tough situation" even after it recently received €130 billion ($174 billion) in aid. "One sympathizes enormously with what the Greek people are going through," he said.
“The fact that European Central Bank president Mario Draghi came in and the cut interest rates twice boom, boom; I thought he’d wait indicates he is brave,” Fischer said. “He sent the right signal to the market.”
Fischer also spoke about a trend in the haredi (ultra-orthodox) community. “It’s definitely changing,” Fischer said. “The men are beginning to go out to study secular subjects and to work in the formal labor force.”
Fischer concluded the interview with cautious optimism. "The problems that the global economy is dealing with are not simple, but the US has always risen to the occasion when it has had to. I hope and expect that happens again.”
Published by Globes [online], Israel business news - www.globes-online.com - on February 26, 2012
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