In a new measure aimed at increasing transparency and competition in the financial sector, Bank of Israel Supervisor Hedva Ber on Thursday said she would push legislation aimed at curtailing the “extravagant” paychecks of banking tycoons.
“The current salary standards have a negative impact on the public’s trust in the banks,” Ber said at finance conference in Tel Aviv, according to a report in the Globes business daily.
According to the Globes report, Bank Leumi CEO Rakefet Russak-Aminoach took home NIS 8.12 million ($2.1 m) in 2015, while chairman David Brodet took home NIS 5.82 ($1.5 m).
A 2013 Bank of Israel study found that 16 percent of bank employees (or over 7,000 people) earned between NIS 45,000 ($11,500) and NIS 80,000 ($21,000) a month.
In contrast, the average monthly wage in Israel stood at NIS 9,688 ($2,500) as of November of last year, according to the Central Bureau of Statistics.
According to Ber, the lack of competition in the industry and high salary costs — which amount to some NIS 18 billion annually — stand in the way of reducing the fees and interest rates that banks charge customers for services.
At the conference, Ber said she intends to push for Knesset legislation that would ensure “appropriate” compensation for senior bankers, in accordance with a directive issued by the regulatory body last year.
Since her appointment to the post last June, Ber has spearheaded a number of measures aimed at reforming consumer banking.
In January, the Bank of Israel announced banks would be required to issue standardized ID cards to customers so they can easily read their bank balance, expenses and loan information. Since the ID cards are to have a standardized format, the cards will also make it easier for customers to compare competing offers by other banks side-by-side.
The central bank also recently issued directives to banks requesting they review accounts held by their elderly or handicapped customers to make sure they were not paying excessive bank fees.
Last year, Bank of Israel Governor Karnit Flug and Finance Minister Moshe Kahlon agreed to form a committee headed by former antitrust commissioner Dror Strum, to explore ways to inject competition into Israel’s consumer banking.