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Bank of Israel Governor Stanley Fischer on concerns over the European economy and Israel’s relationship with the U.S.
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World Economic Forum in Davos Switzerland -- -- is going one on one.
Was some of the -- most influential global leaders.
As we are faced with the worst financial crisis since the Great Depression.
The 2 most closely watched central bankers in the world would obviously be Ben Bernanke of the United States and Mario -- of the European Central Bank.
Both the cup race both of put liquidity -- -- -- orders of their respective financial systems and both.
Had the same professor at MIT a central banker himself.
-- welcomed by the governor of the central Bank of Israel Stanley Fischer what's the water at MIT.
-- -- Let's what was in order to MIT and probably still is is that the very best students in the world come to get -- Ph.D.s.
And Ben Bernanke is remarkably good student Mario.
Remarkably good one of the earliest Italians.
And when they -- -- about crossing.
That helps and who hasn't been challenged Mario drug gets ECB or Ben Bernanke.
At the moment it looks like Mario but it's both of them have major challenges ahead nothing in this world of financial uncertainty.
-- is absolutely clear until -- whole game is done historian -- picking at it or not there yet.
Not there yet what is the number one thing that needs to be done in Europe in the Euro -- to make sure.
That that zone doesn't somehow crumpled bits of that -- -- -- talking about possibly Greece or just falls apart completely.
I think the politicians.
Have become seized with the problem off to some time of not doing it but somewhere between September.
Lost here in November.
The political attitude -- was going on change and politicians -- -- very busy.
Dealing with and thinking about what arrangements they need to prevent the sort of thing happening in the future.
And at the same time.
SE CB with regard -- -- -- -- put in as you say a lot of liquidity and that could be.
And a couple of months it'll be a repeat of that operation.
If Greece defaults on its -- first of all do you think that might happen and secondly if it did.
Just the eurozone fall apart.
Well look as though are very tough questions and I don't like are answering hypothetical.
Questions like that -- they'd give Greece is forced to default.
I suspect that the -- we'll make every effort.
Time keep it in the system and find a way of doing that nobody wants to see.
This system which is really one of the great achievements of Europe.
-- Parton.
If it starts you don't know quite where the process ends.
In the aftermath of the first initial part of the financial crisis 2008.
Israel was the first developed nation to eventually tighten rates.
Since then you've cut rates do you see yet another rate cut on the horizon and was that first tightening a little -- -- -- Well that could be a rate cut it really depends on what happens in the international economy and also in our economy and we just wait and -- follow developments.
As to whether the first rate cut was premature absolutely -- We raised at the right time we kept on raising until the international environment and our exports.
Worsened.
And so we reacted correspondingly.
Israel does have high inflation no.
2% 2% but within the correct band I mean that the credit business center of the correct them so you do that -- have a pretty large trade deficit.
Well I I'm glad I have no I know I know -- or to be reading the trade deficit is not a very significant.
Number.
Our overall balance of payments the current account is essentially balance what about your unemployment.
It is the -- this means that he uses five point 4%.
Where does Israel go from here you have an incredibly motivated workforce.
Hi tech giants in this country Yahoo! Intel.
They have set up operations in Israel -- get more of that business so that there are more younger Israelis who become employed in good paying jobs.
-- we have to produce more engineers you have to produce more -- More electric more electrical engineers and people in related professions and we need to do that.
How closely do you watch the United States presidential election and I asked that because of course and those US Israeli relationship has been incredibly strong since the creation of Israel.
And there's been some criticism about the Obama administration that they haven't exactly -- Israeli friendly -- the -- compression.
This is not really mind you my area but my -- what I could from people who should know.
Is that military corporation has never been bit -- and you know there being some political frictions of I think -- the relationship is an extremely healthy one and -- we're happy with it.
And you would know you talk to those people his sort of a big marker in this trial but.
But you go to consulate.
Pacific.
Big way -- about that doctor Fisher thank you so much for joining us on Fox Business thank you very -- very much the governor of the Israeli Central Bank.
