http://www.iht.com/articles/2005/01/10/business/shekel.html
Stanley Fischer, a Citigroup vice chairman and a former deputy head of the International Monetary Fund, has been nominated to succeed David Klein as governor of the Bank of Israel.
Fischer, 61, was offered the job several weeks ago by Prime Minister Ariel Sharon of Israel and Finance Minister Benjamin Netanyahu, the prime minister's office said on Sunday. Klein, who wanted a second term, had been criticized by Netanyahu for tight monetary policy.
Fischer, who has frequently advised the Israeli government on financial issues, will begin a five-year term, subject to cabinet approval, with inflation almost at zero in Israel and lending rates at an all-time low.
Fischer "has the monetary experience and international stature to do wonders for the Israeli economy," said Jonathan Katz, chief economist at Leader & Co. Investment House in Tel Aviv. "It's a fabulous appointment, and I'm amazed that he accepted it."
Fischer, who was an economics professor at Massachusetts Institute of Technology for 22 years, was a visiting professor at the Hebrew University of Jerusalem in 1972. He is also a close friend of a former Bank of Israel governor, Jacob Frenkel, himself a former research director at the IMF and now a vice chairman of American International Group, the world's biggest insurer.
Sharon called the appointment "a golden opportunity for the Israeli economy." Fischer said in a statement issued by Citigroup that he was "honored" to have been offered the job.
Born in Zambia to parents of Lithuanian descent, Fischer is a naturalized U.S. citizen. He is Jewish, speaks some Hebrew and will be granted Israeli citizenship upon his request to immigrate, Sharon's office said.
As the IMF's first deputy managing director from 1994 to 2001, he helped engineer $300 billion in agency-led loans and credit lines to help prop up emerging-market currencies from the Thai baht to the Russian ruble. He earlier served as a vice president for development economics and chief economist at the World Bank.
In December 1997, when South Korea was unable to repay debts and its currency, the won, had touched a record low against the dollar, Fischer said the fund and other donors would provide $10 billion in new aid. The won gained 22 percent the next day.
Other IMF loans were less successful. Russia defaulted on $40 billion of bonds and devalued the ruble in August 1998, less than a month after the IMF approved new loans for the country. In December 2001, Argentina defaulted on $95 billion of bonds and then devalued its currency after the government tapped $20 billion of IMF loans over a decade.
Fischer joined Citigroup in February 2002 and in June of that year was named president of a unit set up to expand the company's business outside the United States. Last year he started the bank's public sector group to strengthen its relationships with governments around the world.
"His experience in the public sector prior to joining Citigroup and his expertise in economics and monetary policy will be greatly missed," the Citigroup chief executive Charles Prince said in a statement.
He did not say who would take over for Fischer.
Israel will benefit from Fischer's political experience, said Roger Kubarych, a former U.S. Federal Reserve economist now an adviser at HVB in New York.