http://www.zerohedge.com/news/2013-10-20/israel-central-bank-follows-fed-first-woman-chairman-appointment-after-larry-summers
Submitted by Tyler Durden on 10/20/2013 08:45 -0400
Israel Central Bank Follows Fed With First Woman Chairman Appointment After Larry Summers' Rejection
Ten days ago, when we reported on the latest rumors surrounding the fiasco that the Israeli central bank governor selection process has become (nearly as farcical as the bungled choice of Yellen in the US), we joking wondered:
Overnight, we once again learned that in the New Normal the thin line between reality and rhetorical absurdity is perhaps too thin, following a report in The Hill that, as we joking suggested, it was indeed Larry Summers who the Bank of Israel had turned to in its quest for governor. From The Hill:
Former Treasury Secretary Larry Summers, who was in the running to succeed Ben Bernanke as chairman of the Federal Reserve , reportedly turned down an offer to lead the Bank of Israel.Israel’s Channel 2 reported on Friday that the former Harvard president was one of multiple non-Israelis approached by Prime Minister Benjamin Netanyahu to succeed Stanley Fischer, who left the post in June after a term that began in 2005.
As a reminder, the Bank of Israel governor selection process has become an even greater fiasco than the choice of Mr. Mrs. Yellen as head of the Fed, after it was none other than JPMorgan Chase International Chairman Jacob Frenkel who was slated to become the new governor when his candidacy went up in a puff of kosher smoke following the release of details involving Frenkel and a shoplifting scandal at a Hong Kong airport duty free store. Guess JPM doesn't pay that well after all.
But back to Larry Summers and the Bank of Israel, which moments ago announced that it has concluded its 112-day process in which it had gone without a central bank chief, and had appointed Karnit Flug as its new governor. In taking a page from the Fed's own selection process, Flug is also the first woman to be appointed as head of the Bank of Israel. FromReuters:
Israel on Sunday named Karnit Flug as the new governor of its central bank, the first woman to be appointed to the office, after a rocky selection process that dragged on for months.Flug, 58, served as deputy to previous governor Stanley Fischer, who stepped down in June after eight years on the job, and has been the Bank of Israel's acting chief since he left.Accepting the post, Flug said in a statement the central bank and Israel's economy faced significant challenges.Announcement of Flug's appointment followed a meeting between Prime Minister Benjamin Netanyahu and Finance Minister Yair Lapid, who had been unable since Fischer resigned to fill the post.
Ironically, just as Yellen was nowhere near Obama's top choice for the new Fed chairman, Flug was not Prime Minister's Netanyahu primary choice.
Fischer had recommended Flug to replace him, but Netanyahu, officials said, had preferred candidates with a stronger international standing.Netanyahu and Lapid initially chose Jacob Frenkel, central bank governor in the 1990s and currently chairman of JPMorgan Chase International, to succeed Fischer, but he pulled out following reports he had been arrested on suspicion of shoplifting at Hong Kong's airport in 2006. Frenkel denied any wrongdoing, and authorities in Hong Kong decided not to pursue the case.A second candidate, Bank Hapoalim Chief Economist Leo Leiderman, also dropped his bid two days after his nomination, citing personal reasons.Netanyahu and Lapid said in a statement: "We were impressed by Dr. Flug's performance over the past months as head of the Bank of Israel and we are confident she will continue to help us lead Israel's economy to further achievements in the face of the world economic upheaval."
Below is Flug's full background from the BOI website:
Dr. Karnit Flug has been the Deputy Governor of the Bank of Israel since July 2011. She was appointed as Deputy Governor by the Israeli Government, in accordance with the Bank of Israel Law, 5770-2010 and with the recommendation of the Governor of the Bank of Israel.
Dr. Flug completed her M.A (cum laude) at the Hebrew University in 1980 and her Ph.D. in Economics at Columbia University in 1985.In 1984, Dr. Flug joined the IMF as an economist. 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.In 1994-1996, while on leave from the BOI, Dr. Flug worked at the Inter-American Development Bank as a senior research economist. In 1997, upon return to the BOI she was appointed Assistant Director of the Research Department and in June 2001 she was appointed Director of the Research Department and a member of the BOI's senior management.Dr. Flug has served on a number of public committees, including the committee on a multi-year defense budget (the "Brodet" committee); the committee aimed at ensuring the long term financial stability of the National Insurance Institute; the committee aimed at enhancing competition within the Israeli markets; the committee for social and economic change (the "Trajtenberg" committee), and several others.
Her response to learning that, just like Yellen, not quite top choice is still "good enough":
Dr. Karnit Flug thanks the Prime Minister and the Minister of Finance on her expected appointment as Governor of the Bank of Israel.Dr. Flug adds that the Bank of Israel and the Israeli economy face significant challenges, and that she looks forward to working in full cooperation with the professional and dedicated staff of the Bank of Israel, as well as with government officials, in order to meet these challenges.
We too were shocked to find no mention of the phrase "Goldman Sachs" in the bio above. As for Larry Summers, we can only imagine to what depths of misogynistic hell his ego must have tumbled after women ended up overtaking him as heads of not one but the two central banks he was slated to head within a month.
http://www.timesofisrael.com/lawrence-summers-rejects-post-of-bank-of-israel-governor/
‘Lawrence Summers rejects post of Bank of Israel governor’
Acting governor Karnit Flug said to be back in the running; Netanyahu rebuffed by former US Treasury secretary, says Channel 2
Lawrence Summers (photo credit: AP Photo/J. Scott Applewhite, File)
Lawrence Summers, a former Treasury secretary and president of Harvard University, rejected a request from Prime Minister Benjamin Netanyahu to become governor of the Bank of Israel, Channel 2 reported.
Netanyahu and Finance Minister Yair Lapid have been striving all year to find a successor to Stanley Fischer, who announced in January that he would be leaving the post and who stepped down in June.
Summers was one of a number of overseas candidates reportedly approached by Netanyahu to have spurned the job. Summers had been widely seen as a possible new head of the US Federal Reserve, but withdrew from consideration last month in the face of rising opposition.
New Haven-born Summers is the son of two economists, Robert Summers (who changed the family surname from Samuelson) and Anita Summers. A renowned economist, Summers built close ties to Obama when he led the president’s National Economic Council in 2009 and 2010.
Bank of Israel acting governor Karnit Flug (Photo credit: Yonatan Sindel/Flash90)
After a meeting late Wednesday, Netanyahu and Lapid said they would name a new governor by Sunday.
Hebrew media speculation has it that the leading candidate for the influential post, in a process that has dragged on for over days, is Professor Zvi Eckstein. Eckstein is the dean of the School of Economics at Herzliya’s Interdisciplinary Center (IDC), and served as the Bank of Israel’s deputy chief between fron 2006-11.
Professor Zvi Eckstein (photo credit: Yossi Zamir/Flash90)
But Karnit Flug, the bank’s acting director whom Fischer had recommended for the post, but who Netanyahu made clear he did not want, was said Saturday to be back in the running.
Two candidates — Jacob Frenkel and Leo Leiderman — dropped out after accepting the post. Frenkel, a previous governor, became embroiled in reports of a shoplifting scandal, which he denied, and Leiderman faced complaints to the vetting committee, known as the Turkel Commission, which he might have resolved but chose to avoid the protracted process.
Another candidate is the internationally renowned Professor Mario Blejer. A third candidate, Victor Medina, is considered an outside bet.
Channel 10 news revealed over the summer that three Nobel Prize-winning American economists, Thomas J. Sargent, Robert Lucas, Jr. and Edward C. Prescott, recommended Eckstein to Netanyahu and Lapid.
Fischer, an American-Israeli economist, served as bank chief from 2005 until this summer, having announced his intention to step down at the start of the year. He was previously chief economist at the World Bank.
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