JERUSALEM/ISRAEL: JACOB FRENKEL, GOVERNOR OF THE BANK OF ISRAEL ANNOUNCES HIS RESIGNATION

Record ID: 399126

  • Title: JERUSALEM/ISRAEL: JACOB FRENKEL, GOVERNOR OF THE BANK OF ISRAEL ANNOUNCES HIS RESIGNATION
  • Date: 14th November 1999
  • Summary: JERUSALEM (NOVEMBER 14, 1999) (REUTERS - ACCESS ALL) 1. EXT: EXTERIOR OF PRIME MINISTER'S OFFICE (NIGHT SHOT) 0.07 2. SCU: BANK OF ISRAEL GOVERNOR JACOB FRENKEL AT PRESS CONFERENCE WITH ISRAELI PRIME MINISTER EHUD BARAK AT PRESS CONFERENCE WITH ISRAELI PRIME MINISTER EHUD BARAK 0.18 3. C/A: JOURNALISTS 0.23 4. SV: SOUNDBITE (English) J
  • Embargoed: 29th November 1999 12:00
  • Keywords:
  • Location: JERUSALEM / TEL AVIV, ISRAEL
  • City:
  • Country: Israel
  • Reuters ID: LVACV1LEY42J3E3OT69TC3IJSC02
  • Story Text: Bank of Israel Governor, Jacob Frenkel, known for
    his tight monetary
    policies that have helped bring down inflation in Israel, has
    unexpectedly
    announced his resignation.

    Frenkel, whose tight monetary policies helped to
    slash inflation but
    angered politicians and industrialists, announced on Sunday
    (November 14) he was
    resigning effective January 2.

    Frenkel has been head of Israel's central bank since 1991.

    He has often been criticised for keeping interest rates
    high, a policy many economists
    said hindered economic growth.

    At a news conference attended by Prime Minister Ehud Barak
    and Finance Minister
    Abraham Shohat, Frenkel said he decided to quit eight months
    before the end of his
    second five-year term because he had largely achieved goals he
    had set when he took the
    job.

    "My decision to leave is based on the assessment that most
    of my objectives that I
    set for myself when I started the job in 1991 have been
    reached.

    Inflation has reached close to the levels in
    industrialised countries, the forex
    (foreign exchanged) markets have been liberalised, the
    exchange rate regime has
    become much more flexible, capital and financial markets are
    integrated and the
    banking system is robust," Frenkel said.

    His resignation after nearly nine years in office appeared
    to clear the way for Prime
    Minister Ehud Barak -- under pressure to make good on campaign
    pledges to jumpstart a
    sluggish economy -- to appoint a successor who might loosen
    monetary reins.

    But at a press conference on Sunday, Barak's appeared to
    back Frenkel's tight
    fiscal policies.

    "I believe in a tight fiscal and monetary policy to
    provide the basis for renewed
    growth in our economy.And I believe in deregulation and
    privatization and in a way
    that will be sensitive to (the) human beings that constitute
    our society"
    Barak said he would identify and appoint a successor as
    soon as possible.

    Despite Barak's words, Frenkel's resignation has been seen
    as likely to spark
    speculation of a softer monetary policy to jump-start the
    economy, which has been mired
    in a three-year slow-down but has recently shown signs of
    renewed growth.

    Barak has come under fire from coalition partners and in
    the media for what critics
    view as his failure to fulfill pledges from last May's
    election to help Israel's poor by
    fighting unemployment and boosting economic activity.
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