Treasurer vows to end troika’s control of banking industry
Kahlon and banks chief Flug name panel to open financial services sector to competition
A new state committee was tasked Wednesday with increasing competition in the banking industry and curbing the overwhelming control of the sector enjoyed by the county’s three top financial institutions
The appointments to form the panel were made by Bank of Israel Governor Karnit Flug and Finance Minister Moshe Kahlon, who was swept into office earlier this year on a record of working toward deregulation.
The committee is expected to make recommendations on introducing new players into the sector, including, among other measures, separating credit card companies from banks.
At a press conference to announce the project Kahlon said the new committee would aim to introduce “real competition in one of the most centralized sectors of Israeli economy – the banking system.”
Kahlon said the country’s three largest banks held 70 percent of the industry, a situation which cost consumers hundreds of shekels every year.
“Competition is the best friend of the consumer, it is good for companies and it is good for citizens and this is why we aim to promote it in every sector,” he said.
Kahlon, who made a name for himself by opening up the cell phone industry while serving as communications minister five years ago, said his next targets for reform would be the insurance industry and pension plans.
Flug noted that “in recent years supervision of banks has brought about significant steps to increase competitiveness, and the Bank of Israel is part of the effort to continue to improve this sector.”
The committee is to 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, outgoing 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.
Kahlon and Flug called on the committee to submit a report by September 11, 2015, 100 days from Wednesday.
Gilo submitted his resignation as head of the Antitrust Authority last week over anger at the government’s refusal to break up a gas monopoly. He is due to step down in August.
