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Economist withdraws Bank of Israel candidacy

July 29, 2013

JERUSALEM (AP) — One of Israel’s top economists on Monday withdrew his candidacy as head of the central bank over an old shoplifting case.

The incident happened in a Hong Kong airport seven years ago. Jacob Frenkel told Israeli media he mistakenly thought his companion paid for an item he was carrying.

A committee reviewing his appointment raised questions about the incident, and Frenkel decided to withdraw his candidacy. Frenkel did not report the incident to the committee.

It was meant to be the second time that 70-year-old Frenkel headed the Bank of Israel.

Israeli Prime Minister Benjamin Netanyahu issued a statement praising Frenkel and harshly criticizing the reports that led to his withdrawal.

“This is a direct result of an atmosphere in which a person is slandered without the opportunity to present his side,” the statement said. Frenkel “was an outstanding governor of the Bank of Israel, and could have brought great benefit to the Israeli economy in dealing with the world economic crisis,” said the statement, signed by Netanyahu and Finance Minister Yair Lapid.

An economics analyst said there is no indication that Frenkel was charged in the shoplifting case. The government did not comment on that aspect.

Frenkel was governor from 1991 to 2000. He won praise for reducing inflation, liberalizing markets and integrating Israel’s economy into the global financial system.

He has since worked in finance, including as chairman of JPMorgan Chase International.

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