Prime Minister Benjamin Netanyahu and Finance Minister Yair Lapid have named Dr. Karnit Flug as the ninth governor of the Bank of Israel. She will be the first woman to hold the prestigious position.
An official statement by the Prime Minister's Office said Sunday that Netanyahu and Lapid have named Flug as the next governor of the Bank of Israel, and that both were "impressed by Dr. Flug's performance over the past few months, as the acting central bank chief. We are sure that she will continue to assist us as we march Israel's economy forward toward new heights, as we face global economic woes."
In a short statement released Sunday afternoon Flug expressed her gratitude to Netanyahu and Lapid, saying "The Bank of Israel and the economy are facing significant challenges," adding she looks forward to "working with the bank's devoted and professional staff, as well with the various government bureaus, to meet these challenges."
The nomination brings to an end a lengthy saga, which included the botched nominations of former Bank of Israel Governor Jacob Frenkel and Bank Hapoalim Chief Economist Leo Leiderman -- both of whom withdrew their candidacy amid allegations of conduct unbecoming a public official. Flug, who was endorsed by former Bank of Israel Governor Stanley Fischer as his replacement, had originally announced that she would be leaving the Bank of Israel following the nomination of the new governor.
The position of Bank of Israel governor mandates that candidates be vetted Public Service Nominations Committee. Flug was vetted by the committee in 2010 before she was named the deputy governor. It is still unclear whether she will have to be vetted again.
Flug has been the serving as deputy governor of the Bank of Israel since July 2011. She holds a master's degree in economics from the Hebrew University and a doctorate in economics from the Columbia University. In 1984, Flug joined the International Monetary Fund as an economist and in 1988, she returned to Israel and joined the Research Department of the Bank of Israel, where she worked and published papers on topics related to the labor market, balance of payments and macroeconomic policies.
Between 1994 and 1996, while on leave from the Bank of Israel, Flug worked at the Inter-American Development Bank as a senior research economist. In 1997, upon return to the Bank of Israel, she was appointed assistant director of the Research Department, and in June 2001 director of the Research Department and a member of the Bank of Israel's senior management.
Flug has served on a number of public committees, including the committee on a multiyear defense budget; the committee on ensuring the long term financial stability of the National Insurance Institute; the committee aimed on enhancing competition within the Israeli markets; the committee for social and economic change and several others.