14 November, 1999

The Governor of the Bank of Israel has informed the Prime Minister
of his intention to resign from his post

The Governor of the Bank of Israel, Professor Jacob Frenkel, has informed the Prime Minister, Mr. Ehud Barak, of his intention to resign from his post on 2nd January, 2000. The Governor, who is currently in his ninth year of office, was first appointed in August 1991, and was reappointed for a second term in August 1996. In a letter sent to the Prime Minister several months ago, Professor Frenkel noted that the policy objectives he had set upon taking office had been attained in full: inflation has been reduced to its lowest rate for three decades, and is currently very close to the rate prevailing in developed countries; the removal of foreign exchange controls and the liberalization of the foreign-currency market has been highly successful, and the exchange-rate regime has become more flexible; Israel’s money and capital markets have undergone far-reaching changes, and have become an integral part of the international markets; Israel’s banking system is modern and robust, and the Israeli economy has become a preferred destination for foreign investors. In particular, while absorbing large-scale immigration, Israel has managed to integrate in the world economy with the utmost success, as is appropriate in the era of globalization. Israel is now poised for the renewal of sustainable growth. a process that is now underway as indicated by recently published data. The Governor pointed out to the Prime Minister that for some time he has been considering his decision to end his public service and pursue other activities. However, because the general elections had been brought forward, his concern about and responsibility for the stability of the financial markets had led him to defer the implementation of his personal plans until the clouds of political uncertainty had been dispersed, and until the economic policy strategy had been put in place. The Governor also noted that during his years in office he had been able to serve the State of Israel at a time of dramatic changes that had included the large-scale absorption of immigrants, the peace process, and Israel’s integration within the world economy. The Governor added that through his years in office that he had been privileged to work with five prime ministers, and was deeply grateful for the opportunity that had been granted to him to make his own humble contribution to the attainment of Israel’s economic goals. He also wished the Prime Minister and the government every success continuing on this path and in aspiring towards the full implementation of the economic policy that would benefit the country as a whole. The Prime Minister expressed his great appreciation and gratitude for the Governor’s consistency, determination, contribution in reducing inflation, achieving economic stability, improving Israel’s financial standing, and enhancing its successful integration within the world economy. He noted the Governor’s consistency, determination firmness and professionalism in his endeavors to attain Israel’s economic goals, chief among them being the attainment of the conditions for sustainable growth. The Prime Minister stated that the Governor’s policy throughout his term in office had firmly established the status of the Bank of Israel and paved the way-in which it would be necessary to persist-for Israel to meet successfully with the challenges of the twenty-first century. The Prime Minister praised the threefold cooperation that had been evident between himself, the Governor of the Bank of Israel, and the Minister of Finance during the months in which the present government had been in office, as well as in the discussions regarding the budget and inflation targets for the coming years. He added by stating that he would act an soon as possible to appoint the next Governor of the Bank of Israel.