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22.12.2014
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Bank of Israel chief Stanley Fischer to leave post this summer
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Dan Margalit

The Fischer king

The expected resignation of Professor Stanley Fisher from the Bank of Israel arouses sadness and concern. During his eight-year tenure as the central bank's governor, Fischer was an important asset both to Israel and Israel's functioning in the international economic arena. Indeed, he is stepping down quietly and in an orderly fashion. He is waiting to resign until the government is formed and will subsequently act according to the budget that the new Knesset will pass. Nevertheless, he will be spoken of national and internationally in the economic field as profoundly absent, for years to come.

Rumors of Fischer's intention to retire surfaced around the time he agreed to a second term. He half-heartedly denied this. But because the government and the local business community so badly wanted him to remain the bank's governor, they ignored the hints.

Now, as expected, the opposition will argue that Fischer's resignation is a slap in the face to the government over its policy — a claim the government will deny.

Only Fischer can reveal the truth.

Whatever the case, it is clear that the Israeli economy is entering narrow straits and will have to implement wide-reaching cuts. It is unfortunate that Fischer will not remain at the Bank of Israel to steer fiscal policy in the face of the economic storm.

During his tenure as finance minister, Prime Minister Benjamin Netanyahu persuaded Fischer to take the job. In one telephone conversation between the two men, Netanyahu handed the phone to Nochi Dankner — a prominent Israeli businessman and controlling shareholder of the Israel Discount Bank group — who pleaded with Fischer to heed Israel's appeal.

Eight years later, Fischer is widely believed to have ousted Dankner's cousin, Danny Dankner, who is chief among the suspects implicated in the Holyland affair, from Bank Hapoalim.

From the outset, Fischer did not plan on getting involved in the Israeli economy's political games. He was dragged, almost against his will, into the investigation against Bank Leumi. He was even compelled to take out the trash at Bank Hapoalim.

He encountered the administrative jungle of the Israeli market, which could have indicated that managing banks would not be enough to initiate speedy changes. It was some time before he realized that behavior considered unacceptable abroad is integral to the Israeli experience.

The struggle in which Fischer became involved surprised him, but he navigated with determination and restraint. Fischer asked me at one point to explain the significance of a phrase from the Dead Sea Scrolls — the battle between the Sons of Light and the Sons of Darkness. In the midst of the ongoing battle that surrounded him, including matters that he was appointed to address, Fischer questioned me thoroughly, seeking a comprehensive understanding of the phrase. At the end of the meeting in his Tel Aviv office, he said nothing. He kept his conclusions to himself. The outcome indicated what he truly thought.

Fischer did not volunteer to join the ranks of the Sons of Light, but served as one of their principle fighters. It is possible that his moves against Bank Hapoalim — and to a lesser extent, Bank Leumi — paved the way for confronting both the concentration of economic power and the excessive profits collected by the banks.

An important chapter in this story appears under the name of the governor, who has asked to retire in five-months' time.

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