Frenkel approved as Bank of Israel Governor


As reported in the Jerusalem Post: A committee headed by former Supreme Court justice Jacob Turkel approved Jacob Frenkel to be the next Bank of Israel governor on Wednesday, paving the way for President Shimon Peres and the cabinet to finalize his appointment.

The committee did not take into account a salary scandal, in which a 2002 State Comptroller’s Report accused Frenkel, who served as governor in the 1990s, of receiving “special financial arrangements” in his compensation. Frenkel returned NIS 238,000 to the state at the comptroller’s behest.

Ahead of testifying before the committee Wednesday morning, Finance Minister and Yesh Atid chairman Yair Lapid defended Frenkel over the scandal.

“If Frenkel is only interested in money, why would he leave a position that pays him 20 to 30 times the salary to be Bank of Israel governor?” Lapid said in a fiery interview with Israel Radio’s Keren Neubach.

Frenkel was serving as JPMorgan International’s chairman when he accepted the nomination to replace Stanley Fischer, who stepped down as governor at the end of June. The significant pay cut Frenkel was taking, Lapid said, showed he was committed to the public.

“The state comptroller said to return [the money], and it was returned,” Lapid said over Neubach’s protestation that it was the attitude toward public funds, not Frenkel’s bottom line, that was disconcerting.

“He’s a straight man, he’s a decent public worker, he’s an Israel Prize winner, he’s a man who came to serve the public,” the finance minister said. Lapid also promised he would lower taxes as soon as the budget allowed.

“The moment the economy stabilizes, the moment that this deficit, this budget hole closes, and we return to growth, say 4 percent, I don’t see why not,” Lapid said.

“It’s not my goal in life to impose taxes. We have to do it now because we have to close a budget hole.”

In order to secure economic growth in the future, he said, integrating the ultra-Orthodox into the workforce was a crucial measure.

“It’s a public that very much wants to work,” he said, praising the ultra-Orthodox as fit for the workforce because “they’re people that have learned to think their whole lives.”

Despite their political leaders’ protectionism, he said, the haredi public “want to earn more, they went to get out of the cycle of poverty and we’ll help them.”

Asked why he did not aim more tax increases at companies and the wealthy, Lapid responded that socialism was a failed policy, though he confessed that unbridled capitalism was not the right course either.

“The solution isn’t take money we don’t have and distribute it,” he said. “The people I demonstrated with last year are people who voted for Yesh Atid, and Yesh Atid voters are very pleased with the fact that someone is demonstrating responsibility, who is fighting for the middle class. They see what I’m doing and know that I protected their jobs. They know to open the newspaper and see that in Europe there are unemployment levels of the kind we don’t have here.”

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