Comments on Fisher's resignation: "Very bad, the government will work double"

"This event will have a negative impact on the capital market stability - now the government will have to work twice as hard to maintain the reliability," believes today (Tuesday) Ron Aichel, chief economist of Meitav, following the announcement by the Bank of Israel on the end of the second term of Prof. Stanley Fischer Governor of the Bank, before the official end.


"The lack of clarity about who replaces Stanley Fischer is expected to increase the level of volatility in the coming weeks, with the potential depreciation of the shekel and the rise in Israel's premium risk (earnings debentures and premium cds.) All this, especially until the government will present to the public an organized plan to cut the deficit," concludes Aichel.

"Economic Foreign Minister goes home"
"Economic Foreign Minister of Israel goes home and the one who will take office will receive extra large shoes," Yaniv Pegut believes, chief strategist of the Ayalon group in response to Fisher's departure. "The Israeli government is required to minimize the window of the personal uncertainties and fill the important position with an economical figure who will be able to be a worthy replacement in the eyes of the public."


"The new Governor shall obtain the economy without significant inflationary pressures, however, he will be required to handle the hot potato of the housing prices. Bottom line this is negative economic news already at the opening of the capital market in 2013," Pegut concluded.

Ella Alkalay, Vice President of Business Development ibi investment house, said, "The Governor's announcement raises the risk premium of the economy and is seen particularly problematic in this period of the absence of clear economic leadership. We should however bear in mind that even though the notice was given today the governor will remain on duty until June and until then the economic leadership will appear. With all the difficulties the Israeli economy is stable and there are several distinct growth drivers who are likely to continue to support it."

Finance rule: Calm is seen in the markets
On the other hand, calmer voices could be heard in the market, who believes that the declines in the rates resulted from overreacting to the message. Amir Kahanovich, chief economist at Clal Financing, addressed the message today: "We believe that, down the road we will see serenity in the markets. Investors often tend to panic as an initial response; we saw it in 2005 with the departure of Netanyahu from the Finance Ministry and other similar events in which their impact on the markets was short term.

"Fisher is leaving with no real friction with the Ministry of Finance, and the background is due to extraction and not because of a dispute. The treasury's reliability is also not compromised by such a move, and after the successful issue yesterday, where the treasury issued NIS 8 billion, the pressure on the local currency fell", estimates Chaim Nathan, Menorah Insurance chief economist.


"However, what affects the market now is a combination of the rise in U.S. yields, more than expected deficit, and uncertainty about the budget. Fisher's departure only fuels the fire. However, it appears that within a few days what will determine the tone is the world markets, and the yields in the U.S., "he concluded.

Yochanan Katz and Leader economists Capital Markets responded and said that "the monetary policy is not expected to change following the departure of Fisher. Netanyahu knows that the Governor of the Bank of Israel has to be a credible, independent and experienced monetary figure, and he will seek to appoint an economist estimated with a monetary similar to Fisher's: A combination of focus on price stability along with growth and employment ".

Hapoalim: "Saddened about the decision"
Even Yair Seroussi, Chairman of Bank Hapoalim, and Zion Kenan, CEO of the Bank, commented an official statement on the Governor's notice: "We have heard with regret the decision of Stanley Fischer, to retire from his role as governor of the Bank of Israel. Stanley Fischer, a Jew and a fully fledged Zionist, arrived in Israel after holding senior positions of economic entities of the largest and most important in the world. Stanley answered the call of Ariel Sharon and Benjamin Netanyahu, Prime Minister and Finance Minister, and began to fill his role as the Governor of the Bank of Israel."

"In this role he successfully and impressively navigated the Bank of Israel and the Israeli monetary system, maintained a stable economy during the international crisis, and was valued highly professional when he received the award, Governor of the Year" by the magazine 'Euroman', and achieved high professional assessment twice by the magazine 'Global Finance'," the Bank's announcement.


"The Israeli banking system as a whole, and us personally, saw Stanley as a professional governor, acting with integrity and fairness, and a deep understanding of the needs of the economy and the banking system. His leadership and professionalism will be missed, but we hope he will continue to accompany the economy and the banking sector in Israel in the future with tips and guidance, and we sincerely wish him future success, "concluded the two.

"Significant impact on currency trading"

Yosef Freeman, CEO Prico management and investment, noted that "Fisher's move is expected to have a material impact on the foreign currency exchange market trading in the short term. The equity market does not like non-certainty, and until the identity of the Governor is publicly known. The greatest concern of investors and economists is that behind the resignation there are reasons of macroeconomic significance, which may contribute to depreciation of the shekel towards 3.8 shekels to the dollar. At present special significance will be given to the potential candidates from time to time, as the Prime Minister will be required to act urgently to appoint a search committee."

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