Bank Of Israel To Get First Woman Chief After Netanyahu Is Rebuffed By Larry Summers

Karnit FlugREUTERS/Baz RatnerActing Bank of Israel Governor Karnit Flug.

In September, former U.S. Treasury Secretary Larry Summers was perceived to be President Obama’s top choice to replace Ben Bernanke as the chairman of the Federal Reserve in January.

By September 15, however, he had withdrawn his name from the running.

“I have reluctantly concluded that any possible confirmation process for me would be acrimonious and would not serve the interest of the Federal Reserve, the Administration or, ultimately, the interests of the nation’s ongoing economic recovery,” said Summers in a letter to Obama.

Instead, Federal Reserve vice chairwoman Janet Yellen, who was widely seen in Congress and the media as the most qualified choice for the job, got the nomination.

According to reports, Israeli Prime Minister Benjamin Netanyahu also tried to get Summers for the top job at the Bank of Israel, but Summers turned him down, too.

“Former U.S. Treasury Secretary Lawrence Summers rejected an approach about taking charge of Israel’s central bank after missing out on the Federal Reserve’s top job, according to a person with knowledge of the appointment process,” reports Bloomberg News correspondent Alisa Odenheimer. “Prime Minister Benjamin Netanyahu asked Summers to take the Bank of Israel job during his visit to the U.S. starting in late September, the person said, declining to be identified because of the issue’s sensitivity.”

Yesterday, Netanyahu nominated Karnit Flug as the first woman to become Governor of the Bank of Israel. She has led the central bank on an interim basis since July when former BoI chief Stanley Fischer stepped down.

Flug was hand-picked by Fischer himself, but according to Odenheimer, Netanyahu has come under fire for not nominating her sooner (perhaps because he was holding out for Summers):

Fischer had chosen Flug as his deputy, and backed her as his successor. Netanyahu and his finance minister, Yair Lapid, have been criticised by Israeli lawmakers for repeatedly looking elsewhere before eventually giving Flug the job.

Shelly Yachimovich, leader of the opposition Labour Party, told Haaretz newspaper before the appointment that Netanyahu and Lapid “should go to the home of Dr. Karnit Flug to apologise and beg her to take the job.”

“We were impressed with Dr. Flug’s performance as head of the Bank of Israel in the past few months, and we are sure she will continue to help us lead the Israeli economy to new achievements amid the global economic turmoil,” said Netanyahu in a statement.

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