Fischer and Steinitz at loggerheads over new banknotes

Stanley Fischer also wants to merge the Finance Ministry Capital Markets Division with the Banking Supervision Department, which Yuval Steinitz opposes.

Tensions between Governor of the Bank of Israel Prof. Stanley Fischer and Minister of Finance Yuval Steinitz have intensified of late over Steinitz's refusal to sign the permits for replacing the portraits on the new banknotes.

Another issue is Fischer's wish to take over the Ministry of Finance's Capital Markets, Insurance and Savings Division and merge it with the Banking Supervision Department, a move that Steinitz opposes, with the support of ministry officials. Prime Minister Benjamin Netanyahu is setting up a committee to review the structure of the capital market regulator.

Fischer is up for a second term. In an interview with "Bloomberg" in late December, Steinitz said that the government has yet to ask Fischer to serve a second term after his mandate ends on April 30. Steinitz added that while he has a “high appreciation” for Fischer, he said, “Even the best prime minister or finance minister can have a good replacement."

Despite tensions between Bank of Israel and Ministry of Finance officials at the farewell ceremony for Supervisor of Capital Markets, Insurance and Savings Yadin Antebi last week, the attendees made sure to praise him. Steinitz said, "Antebi was called a boy, but he was the last responsible adult during the toughest times of the financial crisis. This boy was in the front lines and demonstrated steadfastness during one most difficult times we've known, at a time when the media was praising nobody. "

Fischer, who arrived at the ceremony very late, said, "I want to thank you for what you've done in the past four years, including your great contribution in the successful implementation of the Bachar committee recommendations. I know that some people claim that the reform was not a success, but we now know that it contributed to the stability of the financial system."

Fischer added, "An impression sometimes arises as the arguments between us are personal, but that is not the case. There have been arguments over important matters, but we've never thought that the arguments we heard from you were unprofessional. Obviously, where you stand depends upon where you sit. We at the Bank of Israel respect the quality of your work, your professionalism, and your colleagues."

Published by Globes [online], Israel business news - www.globes-online.com - on January 4, 2010

© Copyright of Globes Publisher Itonut (1983) Ltd. 2010

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