"I greatly appreciate Supervisor of Banks Rony Hizkiyahu and his determination. He withstood all pressures and maintained the banking system's level of capital. I strongly support what Rony did in this and other matters," said Governor of the Bank of Israel Prof. Stanley Fischer today at the Hebrew business daily "Kalkalist" conference in Tel Aviv today. He made the comment to explain his motives for intervening in Bank Hapoalim (TASE: POLI) and forcing the resignation of its chairman, Dan Dankner.
"I worked for many years at a big bank, and I was with superb supervisors. They knew how to sense what was going on at the bank, and they were able to spot the problems with near 100% accuracy, but not 100%," he said.
Fischer continued, "Only the bank itself has all the information and knows everything. If a bank doesn’t know, or cannot manage its corporate governance in a way that we, the public, demands, then problems will arise one day. That's why it's necessary to improve banks' risk controls and corporate governance. It's necessary to strengthen directors and increase the number of external directors who are experts in risk management. It's important that there are as many professional, skilled, and independent people as possible.
" We've seen a lot of banks that took on too much risk. Risk management must be a separate function and the risk manager must answer to the CEO, and not report through intermediaries."
Published by Globes [online], Israel business news - www.globes-online.com - on June 2, 2009
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