A shoplifting allegation against incoming Bank of Israel Governor Jacob Frenkel resurfaced last week.

In an incident which was reported in the Israeli press seven years ago, Mr Frenkel allegedly stole perfume from a duty free shop in Hong Kong airport.

Mr Frenkel’s apparent failure to report the 2006 incident to the Turkel Committee — the body set to approve his appointment this week — could have ramifications for his ability to take up the role.

Mr Frenkel, 70, was detained by local authorities Hong Kong and prevented from boarding his flight after being accused of walking off with the perfume. Mr Frenkel has dismissed the incident as “an unfortunate misunderstanding”.

Mr Frenkel, the chair of JP Morgan Chase who is set to replace outgoing Governor Stanley Fischer, said: “The incident took place seven years ago and ended in nothing. The local authorities in Hong Kong reached the conclusion that it was an unfortunate misunderstanding, and expressed their apology and appreciation for my decision not to claim damages for the misunderstanding.”