If bankers are pessimists, why is Stanley Fischer smiling?

Stanley Fischer is governor of the Bank of Israel. He is just beginning a second term in the position. In a recent newspaper interview, he noted that his job requires him to be “concerned” all the time. Yet, if you read the article in full, you will find that this one happy man.

The reasons are not hard to find. Let’s start with the recent past. As a previous Number 2 at the IMF, Fischer knows all about handling financial crises. In late 2008, Israeli politicians left him alone to find a suitable monetary policy to deal with the credit crunch. As they were too busy fighting a general election, there was no opportunity to throw public money at the problem, like in Greece or the UK.

Surprise! Israel was one of the first countries to emerge from the global economic meltdown.

And Israel’s public sector debt today remains serviceable. In fact, there are plans to continue to lower direct and indirect taxation, although a debate remains over what is the correct timing.

Fischer is also thrilled at the opportunities presented by Israel joining the OECD. This will open up the economy to new lines of investment and credit. In the long term, this will help the government to secure balanced budgets.

Domestically, the economy knows that thre is a wise and caring official in charge. In the past year, Foreign currency speculators have been fought off. The head of the country’s largest bank has been forced to resign. And May 2010 has seen the cenral bank prick a potential real estate bubble.

So, whilst the soars of Athens can still be felt across Europe, Israel still remains an economic pleasure spot in the Mediterranean basin. Thanks Stan! Your keep on with your fretting, whilst us poor civilians reap the benefits.

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One Comment on “If bankers are pessimists, why is Stanley Fischer smiling?”


  1. […] Stanley Fischer, governor of the Bank of Israel, has pointed out several times that Israel was fortunate during the initial stages of the credit crisis. As the country was going through a general election, central government was weak. Nobody in authority was around to push through a large fiscal package. Debt did not go through the roof, as in the UK and elsewhere. […]


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