"We wouldn't approve such debt today; we'll start an investigation," Supervisor of Banks Hedva Ber told "Channel 2." She said that the unprecedented debt arrangement that the banks had intended to grant businessman Eliezer Fishman had severely damaged public confidence in the banking system.
Ber said that such a debt arrangement had been possible in the first place simply because the loans had been granted to Fishman a decade ago, and that such an arrangement would not be approved today. "This is the banking of the past; today, such debt would not be approved. The Bank of Israel Banking Supervision Department demanded that the banks greatly decrease their credit to large borrowers," she declared.
"I am certainly willing to have an examination and an investigation into the matter," Ber added. "We will be glad to learn lessons, so that the public will regain its confidence in the banks. The State Comptroller examined this, and I agree to a new probe," she said. She went on to explain, "A large proportion of Fishman's credit was granted long before he owned a newspaper. It was due to the overconcentration of large borrowers in the economy. Such a thing could not happen today - express orders have been issued to the banking system not to grant such credit."
Ber said what caused the change in her attitude towards taking another look at the matter. "A proposal was made for a parliamentary investigative committee, and we did not support it. We waited for the examination, and our opinion changed. We will facilitative an examination. When we saw the proposed debt arrangement, I spoke with the CEOs of all the banks, and told them that I expected the arrangement to be considered not merely from the financial standpoint, but from the standpoint of public trust in the banking system. We saw that all the banks rejected the arrangement," she concluded.
Published by Globes [online], Israel Business News - www.globes-online.com - on June 11, 2017
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