BANK OF Israel governor Stanley Fischer, who made aliyah and joined Israel's central bank two years ago after a successful banking career in the United States, showed this week that he had mastered the tactics of hardball Israeli negotiating. After the Treasury had sent warning letters to Bank of Israel staff on Monday, saying that they had to repay salary benefits that the Treasury claimed had been illegally paid to them, Professor Fischer announced that he would hold an urgent press conference at 8pm, the prime time of Israel television news. Rumours quickly began circulating that the governor was about to announce his resignation and the main indexes on the Tel Aviv stock exchange fell. A worried Prime Minister Ehud Olmert instructed Finance Minister Avraham Hirschson to begin immediate negotiations with the Bank of Israel. Once Mr Hirschson made contact with the central bank, Professor Fischer cancelled the scheduled press conference, and the stock exchange recovered. A statement issued by the Bank of Israel said that the bank and Treasury had agreed to hold intensive negotiations so as to finalise a new wage agreement for Bank of Israel staff. Round one to Stanley.
This post was written by Jeff Barak
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