Podcast: Bank of Israel’s Flug reflects on her time as governor

Former IMF economist talks about how her love of policy helped her lead Israel’s central bank
Karnit Flug
Karnit Flug with her 2019 Governor of the Year Award
Janie Airey

“The Bank of Israel is gender blind,” says Karnit Flug. “At no stage did I ever feel discriminated against; that is until there was an issue with my governor appointment.”

Flug is the first woman to ever hold the office of governor at the Bank of Israel. She is also the first candidate to have to fight for such a position.

Speaking in the latest episode of CB On Air’s Womenomics series, the former governor reflects back on her highs and lows in the economics profession.

“I never thought I would be governor, but somehow, it happened,” she says.

Flug has in many ways had a classic career as an economist and central banker. In 1980, she graduated from the University of Jerusalem and later gained a PhD from Columbia University before starting her career at the International Monetary Fund.

Her love of policy drew her back to Israel in 1988, joining the central bank’s research department, where she remained for the majority of her central banking career.

 

 

In 2001, she became head of the department, before being promoted to deputy governor under then-governor Stanley Fischer.

“I learned a lot from him,” she says. “He was very important in giving me the confidence I could do his job.”

But despite standing in as the interim governor when Fischer stood down, Flug was passed over several times for the job. “He [Fischer] was very supportive of me… but I was not the first choice of our prime minister,” she says.

The government snubbed her twice for the governor’s role, after which she tendered her resignation from the bank. The government’s chosen applicant – Leo Leiderman – then withdrew himself from the process following harsh criticism about the appointment process in the media.

Flug was finally offered the job in October 2013. She served a five-year term and stepped down in late 2018.

Index

00:00 Introduction

01:00 Wanting to change the world

04:10 From economist to manager

06:20 Tumultuous appointment

08:40 Flug’s legacy

11:30 Changing the status quo

15:10 Wasting talent

To hear the full interview, listen in the player above, or download. Future podcasts in our CB On Air: Womenomics series will be uploaded to centalbanking.com. CB On Air is also available via iTunes or podcast apps and from Google Podcasts (Android only).

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