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.