Yaakov Frenkel
Yaakov FrenkelIsrael news photo: Flash 90

Yaakov Frenkel announced Monday night that he would not be taking the job of Bank of Israel chairman. Frenkel decided not to take the job, sources said, due to allegations that he shoplifted an item in Hong Kong several years ago.

The incident occurred in 2006, when Frenkel was held up at Hong Kong's airport after being accused of taking a garment bag from a store in the airport without paying for it. Frenkel has denied any wrongdoing, saying that the incident was a misunderstanding. In an interview, Frenkel said that he had been in a rush to catch a plane, and had asked a colleague to pay for the item. Hong Kong airport officials closed the case against Frenkel, he said.

Last week, the High Court threw out a petition against his appointment, paving the way for Frenkel to take up the post for the third time.

Frenkel's decision puts Prime Minister Binyamin Netanyahu in a bind, as former BOI Chairman Stanley Fischer, whom Frenkel was meant to replace, retired in June. The BOI is being chaired temporarily by Dr. Karnit Flug, but she is legally only allowed to hold the job for several months.

In an interview with Channel Two Monday night, Frenkel said that several individuals had attempted to “mar my good name and in my honesty. Despite the setbacks I decided to go for the appointment. I answered the questions, provided the documents, presented my side of the story, and respected the wishes of the nominating committee not to go public with the story. So I remained silent until now.”

It is not clear who Netanyahu will nominate for the job in the wake of Frenkel's decision. Commenting on the decision, Netanyahu, along with Finance Minister Yair Lapid, said in a joint statement that they regretted Frenkel's decision, “the direct result of the environment we live in in which a person can be defamed without being given the right to present his side of the story. Professor Frenkel is a man of great qualities and much accomplishment, and could have helped guide Israel through the morass of the world's economic challenges.

“As things stand, it would not be surprising if a day would come soon in which no one will want to take on any public office,” they said.