Israeli PM announces appointment of next Bank of Israel governor

Israeli Prime Minister Benjamin Netanyahu announced on Sunday evening the appointment of Prof. Jacob Frenkel as the next Governor of Bank of Israeli (BoI). The appointment, which was first reported by the Channel 2 news, was confirmed in a statement by the Prime Minister's Office. According to the announcement, Netanyahu, together with Finance Minister Yair Lapid, decided to appoint Frenkel, who served as the BoI governor between 1991 and 2000, as new Governor of the Bank of Israel. The appointment is now awaiting the final approval of a committee appointed to track down the new chancellor and then by the Israeli cabinet. Frenkel will replace outgoing chancellor Stanley Fischer, who has announced his resignation in January due to "personal reasons. " The nomination came as a surprise as Frenkel, who is considered to be close to Prime Minister Netanyahu, had not appeared on the list of nominees for the role. Although politicians have yet to respond to the surprising appointment, several economists did comment on the nomination. "I think the appointment is a surprise on the upside," Rafael Gozlan, chief economic at the IBI Investment House, told the Ha' aretz daily. "The markets will like it, based on his experience and status in the world and familiarity with the Israeli economic scene. I believe he will continue the same lines of Fischer's policy," he added. Frenkel, 70, is an Israeli economist with a PHD in economics from the University of Chicago who won the Israel Prize in Economics back in 2002. He also worked as an economic adviser and research manager at the International Monetary Fund (IMF), Vice Chairman of the American International Group (AIG), while the company collapsed and was nationalized, and chairman of the JP Morgan International in 2009 during the global economic crisis. In 2002, not long after leaving his post as BoI Governor, he paid 300,000 shekels (85,000 U.S. dollars) back to the BoI after the State Comptroller charged he had received irregular payments during his tenure. Frenkel will be entering his role at a crucial time for the Israeli Economy, as the treasury's deficit mounted to 11 billion dollars. As a result of this figure, the Finance Ministry is currently working on authorizing an austerity budget set to include 4 billion dollars in tax hikes and 5 billion dollars cuts in ministries' spending.