Two months after becoming Governor of the Bank of Israel and six months after becoming Acting Governor, Dr. Karnit Flug is facing a barrage of criticism from Israel's most senior analysts. On Thursday, Flug consulted with leading capital market experts (chief economists from the banking system and institutional bodies) in a routine periodical briefing of the type initiated by her predecessor Prof. Stanley Fischer.
One senior analyst said, "She is a disappointment. It's not clear how she let the dollar reach where it is against the shekel."
Another senior analyst said, "Dramatic things are happening in the capital market and it's not clear why she hasn't appointed a deputy governor who understands the subject."
A third analyst added, "Flug radiated a lot of optimism due to the fact that the Bank of Israel raised its growth forecast, so probably as far as she is concerned everything is fine. Flug has been repeating this mantra since May that the exchange rate hasn't changed very much…. Really."
Flug told the analysts that she does not agree with the idea of an exchange rate floor and quoted Fischer, "A central banker never says never."
Another senior analyst said, "If she thinks she can spend five years copying Fischer's policies, she's mistaken. She's not Fischer."
Published by Globes [online], Israel business news - www.globes-online.com - on December 29, 2013
© Copyright of Globes Publisher Itonut (1983) Ltd. 2013