Kahlon, Flug name panel to foster competition in banking sector

Finance Minister Moshe Kahlon and Bank of Israel Governor Karnit Flug appoint a committee to increase competition in financial and banking services.

In a letter of appointment sent to members, Kahlon and Flug write that financial services are highly centralized, which can be hurtful especially toward households and small businesses. “Because of this, steps are needed to increase competition and reduce centralization in this field.”

The committee is expected to make recommendations on introducing new players into the sector, including, among other measures, separating credit card companies from banks. It is expected to submit a report “within 100 days from the date of this letter,” i.e., by September 11, 2015.

The committee will be headed by Dror Strum, a lawyer and the director general of the Israeli Institute for Economic Planning. Its members include Prof. Avi Ben Bassat, a Hebrew University professor in the Faculty of Economics’ Amir Levi and Yael Mevorach, the director of budgets and deputy director of budgets, respectively, at the Finance Ministry; Nadine Baudot-Trajtenberg, deputy governor at the Bank of Israel; Prof. David Gilo, director of the Antitrust Authority; Avi Licht, deputy attorney general on fiscal and economic matters; and Prof. Nathan Sussman, manager of the Research Division at the Bank of Israel.

Gilo submitted his resignation as head of the Antitrust Authority last week. He is due to step down in August. The letter does not say if his position on the committee is replaced.