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Bernanke Praises His Teacher: Israeli Bank Governor Fischer

Israeli Central Bank Governor Stanley Fischer earns praises from his former student, Federal Reserve Bank chief Ben Bernanke.
By Tzvi Ben Gedalyahu
First Publish: 12/13/2010, 9:11 AM / Last Update: 12/13/2010, 9:32 AM

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Ben Bernanke, chairman of the U.S. Federal Reserve Bank, took time out this week to praise his Israeli counterpart and former teacher, Stanley Fischer, who was named “Person of the Year” at the annual Globes Business Conference.

“It's a privilege for me to say a few words in honor of my teacher,” Bernanke said in a taped message aired at the conference in Tel Aviv. Fischer was Bernanke’s economics professor at the Massachusetts Institute of Technology (MIT). Fischer later taught at Stanford University and was lured by Prime Minister Binyamin Netanyahu five years ago to move to Israel as an Israeli citizen and take over the post as governor of the Central Bank.

"He was at the forefront of research,” Bernanke said. “He's doing incredible work at the Bank of Israel. Fischer is a leading voice in the global economy. On a personal level, I very much value the talks on policy issues we've had since I became Fed chairman.”

Fischer has become the envy of world bankers as Israel weathered the global financial crisis two years ago and remains one of the most stable economies in the world.

Fischer has also defended Bernanke’s controversial “quantitative easing 2” program that enables the Fed to buy hundreds of millions of dollars worth of assets. Fischer reasoned that the risk of higher inflation in the United States is worth the effort to boost the sluggish American economy.

Fischer’s main battle in Israel is to put a lid on the soaring housing market. He has raised interest rates, and new home prices have been begun to drop slightly. Fischer has warned it is too early to declare that the market has cooled and added that the Bank of Israel will take more measures to control housing prices.