Prime Minister Benjamin Netanyahu and Finance Minister Yair Lapid agreed to nominate Jacob Frenkel, chairman of JPMorgan Chase to replace the outgoing chair Stanley Fischer as the next governor of the Bank of Israel, it was announced on Sunday.
Although Israel comprises a tiny economy on the world stage, its policies are closely followed by European countries and the US considering the country’s ability to avoid recession in a time of global economic tumult. The governor of the Bank of Israel is a central player and sets the country’s pace by devising its fiscal policies.
Prime Minister Netanyahu is a believer in monetarist policies, and Yair Lapid, who once in an interview with Netanyahu admitted to know nothing of financial matters, is widely believed to embrace Netanyahu-style free market policies.
As the governor of Israel’s central bank between 1991 and 2000, Mr Frenkel reduced inflation, modernized and liberalized Israel bureaucratic financial markets and removed obstacles and helped to instill a culture of free markets into the Israeli economy and society.
Many argue that Frenkel was picked due to his wide-reaching international status together with an in-depth familiarity with the Israeli economy. Slower-than-expected growth and constantly increasing housing costs will keep Mr. Frenkel busy. Most of all, he is expected to follow in the footsteps of widely liked and admired Stanley Fischer who steered Israel through tumoltous economic times, successfully and unscathed.