Economist Leo Leiderman was named Israel's central banker on Wednesday, days after the previous candidate pulled out after an investigation against him on a shoplifting allegation.

"Israeli Prime Minister Benjamin Netanyahu and Finance Minister Yair Lapid have decided to name professor Leo Leiderman to the post of governor of the Bank of Israel," the government said in a statement.

The appointment must still be formally approved by the government.

A macroeconomics professor at Tel Aviv University, Leiderman has 10 years of senior-level experience working for the Bank of Israel. He is now an advisor to Israel's leading lender, Bank Hapoalim.

The Israeli government initially chose Jacob Frenkel to replace former World Bank chief economist Stanley Fischer, 69, who is stepping down from the central bank governorship after eight years.

However on Monday Frenkel said he would not take the job after an investigation against him on a shoplifting allegation.

The commission charged with appointing senior civil servants asked Frenkel two weeks ago why he had failed to mention a 2006 incident at a duty-free boutique in Hong Kong international airport.

Israeli media reported that a bottle of cologne that apparently had not been paid for had been found in Frenkel's luggage.

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