The Turkel Committee on Examining Senior Public Appointments in the Civil Service last night approved three candidates for Bank of Israel Governor. Retired Judge Yaakov Turkel unexpectedly phoned Prime Minister Benjamin Netanyahu at 7.30 pm yesterday to say that the committee's work was completed and that there was no moral or ethical reason preventing any of the three candidates from assuming the post: Prof. Mario Blejer, Prof. Zvi Eckstein and Victor Medina.
Turkel surprised the prime minister's staff with his call because only two days previously it had been announced that the process would still take some time and there would be no new Governor until after the Sukkot holiday, because the committee still needed to examine a stream of complaints that continued to arrive.
Following the committee's approval of the three candidates, sources in the Prime Minister's Office said today that Netanyahu would decide on the appointment of the new Governor of the Bank of Israel before Yom Kippur begins on Friday night, and would announce the identity of the new Governor on Saturday night after the fast ends. One source said, "It is possible that we will know who the Governor is before Yom Kippur."
Advantages and Disadvantages
Prof. Mario Blejer (65) is considered the leading candidate. He is a former Governor and Deputy Governor of the Argentine Central Bank and was the Deputy of Bank of England Governor Mervyn King. Blejer has a Ph.D. from the University of Chicago and is a world renowned expert on monetary policy and emerging markets who has published hundreds of articles on these subjects. He has held senior posts at the IMF and World Bank and currently serves as monetary policy program manager for the World Economic Forum. His profile is closest to that of the two previous figures appointed to the job but who subsequently withdrew their candidacies - Prof Jacob Frenkel and Prof. Leo Leiderman. This is the reason he is considered favorite for the job.
Blejer's disadvantage in the eyes of some the prime minister's advisors is that he is not familiar enough with Israeli dynamics even though he is Israeli and lived and studied in Israel for some years. However, he left the country a long time ago and although he is an international name, one of his opponents said, "He is no big deal in the world and does not come close to the reputation of Stanley Fischer."
The second candidate is Prof Zvi Eckstein (64) who is Dean of the Faculty of Economics at the Herzliya Interdisciplinary Center (IDC) and a former Deputy Governor of the Bank of Israel under Fischer, who refused to support his campaign to become Governor. Eckstein was favorite to get the job until several weeks ago when he committed several tactical blunders which lit red lights in Netanyahu's office. Firstly, he recruited three Nobel Prize winners to send letters of recommendation for him, which was considered "childish" because none of the laureates have any experience in the relevant field. He also recruited Prof. Manuel Trajtenberg to support him but although he is a popular person he is not appreciated by Netanyahu. He also hired the publicist who represented one of the women who complained in the rape accusations against former President Katzav, which also harmed him. Eckstein has many supporters but also some enemies in the Bank of Israel.
The third candidate is Victor Medina (74) who was first considered an outsider but whose chances have been growing as the days have gone by. Medina is also a former Deputy Governor of the Bank of Israel under Moshe Mandelbaum three decades ago. He is considered a success story in two key roles previously as director general of the Ministry of Finance and CEO of Mizrahi Tefahot Bank (TASE:MZTF). He is strongly backed by Ori Yogev, one of Netanyhu's most influential advisors as well as by Finance Minister Yair Lapid himself, who almost reappointed him as director general, and several days ago appointed him head of the Government Companies Authority.
On the other hand, academics are highly critical of him. Prof. Omer Moav, an expert in macroeconomics told "Globes," "Medina hasn't got a clue about macroeconomics, including about monetary policy issues. From his point of view everything can be summed up in one word: devaluation, devaluation and more devaluation."
Published by Globes [online], Israel business news - www.globes-online.com - on September 11, 2013
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