"Professionally, I achieved the things that I believed I could achieve, and personally, my family lives far away," said Governor of the Bank of Israel Prof. Stanley Fischer at today's press conference, explaining why he unexpectedly announced his resignation, two years before the end of his second term.
"I am leaving the central bank in good shape. I will continue working until the end, and I have five more months. Eight years is a long time. I intended to stay here eight years. I arranged with the prime minister that I would leave after the budget was submitted. I wrote a list of tasks, and I achieved most of them."
Fischer spoke about the restructuring of the Bank of Israel and the management of monetary policy since his appointment as governor in 2005. "It was important to maintain monetary and financial stability, and we did. I know that I will leave the central bank in good shape. The new corporate governance system at this national institution is very strong," he said.
"The next governor will be in a better position than I was when I arrived at the Bank of Israel. We have a Monetary Council with three external professors. This results in better, more established, and higher quality monetary policy. It supports the next governor and what he does, and will also prevent him from making big mistakes. The Bank of Israel has operated at a very high level. There were no mistakes that I can recall."
Fischer said that the Israeli economy faces many challenges, including passing a "responsible budget that will keep up stable with a limited deficit that is under control." He said that there was too much bureaucracy, and that Israel's ranking in the Doing Business Index was constantly falling. "Competition is fierce in the international market, and we must deal with these problems," he said
As for the housing market, Fischer said, "Another problem is housing prices. This is a problem that the Bank of Israel, and especially the Ministry of Finance will have to deal with. What the Bank of Israel can do is to deal with demand, but the government should deal with supply, and that is the most important thing, because that is where it's possible to have the greatest effect."
Fischer fired some barbs, saying, "Bank of Israel employees made almost no mistakes, and I was given the credit, and that that will continue. I had the privilege of working with the Ministry of Finance and finance ministers. The Ministry of Finance is a professional body, but it's a shame that we have a Ministry of Finance that is so strong that it's a dominant factor. Although a worse problem would be a weak Ministry of Finance that has no control over ministries in the policy process and control of spending."
On a personal note, Fischer said, "I have no plans, I have no role, but I intend to be involved in public life in Israel. I hope that my voice will continue to be heard. Israel is my second home, and I am not sure that it will be less so than my first home. Thank you for eight wonderful years; it will not be forgotten."
Asked if he would accept the finance portfolio, Fischer said, "I refused several times to be appointed finance minister. When will I go back to the US? We have not lived near our family for eight years. I assume that we'll live in both countries."
Fischer also implied that Deputy Governor Karnit Flug would be a worthy successor, saying, "I would not have chosen someone to be deputy governor if I did not think that she was fit to be governor."
Asked by "Globes" about two critical problems facing the country, the deficit and housing prices, Fischer said, "The government knows what it must do about the budget. I hope that it will be responsible. It's possible to deal with the budget problem. As for the housing market, the pace of construction has slowed. The housing supply needs to be increased, which is the government's responsibility. I am sure that the Bank of Israel will not let the situation get out of control, and I remind you that I still have five months in the job. More measures may be needed, and if so, we'll take them."
Published by Globes [online], Israel business news - www.globes-online.com - on January 30, 2013
© Copyright of Globes Publisher Itonut (1983) Ltd. 2013