Spanish banks are laying off workers, and getting EU bailouts. The Anglo Irish Bank is being liquidated. Some British banks have been part-nationalized to stave off collapse, and Italy and Greece are struggling to keep their economies afloat.
But Israel – beleaguered, embattled and with few natural resources – has managed to keep its economy not only buoyant but racing away at an enviable speed during these troubled times.
How on earth did we manage it?
Well, there are many that point the praise at the governor of our central bank, the inimitable Professor Stanley Fischer. Yes, Stan The Man, captain of the good ship Bankofisrael, author of the acclaimed Essays on Contingent Assets and Felafel, Go Easy on the Schug, and founder of the Eazy Muney, no-commission, currency exchange kiosk on the corner of Ben Yehuda and David Klein streets, has been widely lauded as the one individual who kept his head when all about him were losing theirs, and steered the Israeli economy through the storm. Not only that, but his policies may very well have beneficial effects on our economy for years to come.
Some of you may have heard of the subprime crisis: the crisis that erupted after mortgages were sold at stunningly low prices to the poor and huddled masses of America. These loans were then bundled together into unrecognizable pretty packages with colourful ribbons and funky acronyms, and sold on and on again to everyone in the financial markets. Trouble came when interest rates rose, and the pitiful householders failed to meet payments and defaulted on their mortgages. The collapse of this market knocked out many major players - banks and investment houses - throughout the financial world. Except for Israel’s wonderful banks, which remained robust. Is this because our banks are all-seeing, all-knowing, all-wonderful? Allevai. No, rather because they’re so slow and hadn’t actually got round to unwrapping the pretty packages (and anyway all the acronyms were in English) so by the time our illustrious banks considered buying the subprime loans, it was too late. (Thank goodness).
Anyway, Stan The Man has, among his many policies, introduced such restrictions on the mortgage market in Israel that would make it impossible for any subprime loan sector to even raise its ugly head here. You need a far larger deposit on a home in Israel before you can approach a bank to give you a mortgage, for example. As if buying a home in Israel wasn’t hard enough for newcomers to the property ladder. Housing in Israel is disproportionately expensive (in terms of how many months’ salary one has to earn to buy an average property) not because of mortgage restrictions, but because the state, through the Israel Lands Administration, still owns most land in Israel and is very reluctant to let any of it go.
By the way, if you follow my blog, I wrote a while ago about the popular politician and former cabinet minister, Moshe Kahlon, and suggested that this is a man to watch. And lo and behold, no sooner had Prime Minister Benjamin Netanyahu finished reading my blog and chosen what his wife should wear for that day, than he went and announced that he was appointing Kahlon head of the Israel Lands Administration in order to shake up the whole system. However, the appointment is still pending: As is usual in Israel, Kahlon first has to fill out the forms in triplicate and then bring his end-of-year First Grade certificate, signed by both his parents, and stamped by an authorized notary that knew his First Grade teacher personally for no less than 12 years. So, it’s not yet a done deal.
|Well one of us will have to go. Photo credit: Amos Ben Gershom / GPO|
Stan, in the meantime, announced he’s had enough, that after seven years at the Bank of Israel he’s now saved up enough to buy his own parking space in central Tel Aviv, and has decided to retire. Rumours are rife as to his next move. Some say he’s applied to be the next pope, a position that was opened up recently, and indeed there are reports that white smoke signals have been wafting from his office on the 7th floor. Some say he’ll be off to the sun-soaked state of Florida to write his memoirs “Brother, Can You Spare a Shekel?” to be ghost written by five dead former prime ministers of Israel. Others believe that now that Dame Edna Everage has retired, Stan will be launching his own chat show on cable TV.
Back at the ranch, names are being mooted to replace him. In his professional manner, he did say that his deputy Karnit Flug was certainly capable: “I would not have proposed appointing a Deputy Governor whom I did not believe would be able to function as Governor when necessary.” Flug in the past headed the Bank’s Research Department, and was a member of the government-appointed committee that looked into waste and inefficiency in the army. You are welcome to read the findings of that committee, but – BEWARE! SPOILER AHEAD – basically, they concluded that “the army is full of waste. So let’s help them become more efficient, and give them an extra NIS10 billion a year”. A conclusion worthy of Chelm, without a doubt.
Let’s hope that a suitable candidate pops up before Stan jogs off into the sunset in June. For all our sakes.