Israeli Diamond Portal Reports: “Aggressive Bank of Israel Policy” Worries Moody's

PR Log (Press Release) – Jul 05, 2009 – According to Globes, Moody's representatives, who are currently visiting Israel, are concerned about four aspects relating to the Israeli economy; the aggressive policy of Governor of the Bank of Israel Stanley Fischer, the pronounced power of the Histadrut (General Federation of Labor in Israel) chairman Ofer Eini, the fiscal deficit after 2010, and the "reform fatigue" that the Israeli economy is showing.

Moody's representatives, Kristin Lindow, senior vice president of the sovereign risk group, and Anthony Thomas, VP and senior sovereign risk group analyst, are currently in Israel to resolve the country's sovereign rating. Globes’ representative noted that despite the concerns raised by the two analysts, he gained the impression that Moody's did not intend to downgrade Israel's rating. The two experts reportedly stressed that the Israeli economy, including the financial system, had been much less impaired than other developed and emerging economies during the current economic crisis.

Moody's is reportedly concerned at the aggression and over-intervention on the part of the governor of the Bank of Israel Fischer in the monetary level. They were puzzled by how Fischer will exit from the program of currency and bond purchases, and how long the Israeli economy can sustain near zero interest rates. They also argued that Israel had duplicated US Federal Reserve policy, although the Israeli reality is completely different.  

By: Rachel Lieberman, Israel Diamond Industry Portal