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Outgoing Bank of Israel governor to successor: Be prepared for next crisis

“The economy’s resilience must be improved by many measures because no one knows where the next crisis will come from,” Karnit Flug told the Hebrew business site TheMarker about her successor, University of Pennsylvania economist Amir Yaron.

Bank of Israel chief Karnit Flug speaks at a press conference in Jerusalem on March 28, 2018, during the presentation of the Israel bank's annual report. Photo by Hadas Parush/Flash90.
Bank of Israel chief Karnit Flug speaks at a press conference in Jerusalem on March 28, 2018, during the presentation of the Israel bank's annual report. Photo by Hadas Parush/Flash90.

The outgoing Bank of Israel governor offered a dire warning on Wednesday to her successor: Be prepared for the next economic crisis.

“The economy’s resilience must be improved by many measures because no one knows where the next crisis will come from,” Karnit Flug told the Hebrew business site TheMarker about her successor, University of Pennsylvania economist Amir Yaron.

Flug has clashed with Israeli Finance Minister Moshe Kahlon over taxes and other monetary policies.

“To a large extent, what helped Israel in the [2008] crisis was strong and conservative banks, and the government debt, the long-term decline of which gave the government room to raise the deficit without the markets being moved,” she said.

Approved by a special appointments panel on Thursday, Yaron will begin his five-year term on Nov. 12.

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