Four months after the failure of MK Ayelet Nahmias-Verbin's (Zionist Union) effort to set up a parliamentary committee to investigate the banking system's actions in the affair of businessman Eliezer Fishman, the Knesset plenum is expected to vote on Wednesday on the establishment of a committee headed by Knesset Economic Affairs Committee chairman MK Eitan Cabel (Zionist Union).
The investigative committee will include all the members of the Economics Committee, plus five MKs to be selected by the various factions. Following approval by the Knesset plenum, the Knesset House Committee, headed by MK Yoav Kisch (Likud), will have to approve the investigative committee's composition and letter of appointment. At least officially, the committee will not deal solely with the affair of Fishman and the various parties involved in the matter, but with "the allocation of credit in the economy and debt settlements."
Parliamentary committees are traditionally regarded as a tool for the opposition, and the government coalition therefore usually manages to prevent them from being formed. As reported in "Globes" two weeks ago, the Nahmias-Verbin initiative was welcomed last February by coalition chairman MK David Bitan (Likud), but Governor of the Bank of Israel Dr. Karnit Flug and Supervisor of Banks Dr. Hedva Ber were absolutely and actively opposed. They spoke on the matter with Minister of Finance Moshe Kahlon and senior Ministry of Finance officials, who preferred to avoid an additional collision with Flug. It was eventually decided to establish a subcommittee of the Ministry of Economic Affairs, with much more limited authority.
Authority to issue a summon to a hearing
Unlike other committees, a parliamentary investigative committee has extensive authority, including the right to summon officeholders to a hearing. Economic Affairs Committee sources told "Globes" that establishing the committee meant that both the heads of the banks, including Bank Hapoalim (TASE: POLI) president and CEO Arik Pinto and Bank Leumi (TASE: LUMI) president and CEO Rakefet Russak-Aminoach, can expect a summons to a hearing. Executives from the Bank of Israel and its Banking Supervision Department will also be summoned, as well as representatives of financial institutions. All of these officials will be called on to give an accounting, primarily on the issue of the debt settlement.
Nahmias-Verbin, for whom the investigative committee's establishment will close a circle, told "Globes" today, "I am glad that we have reached the moment the Bank of Israel has realized that public trust, which is so essential for the financial system, requires the establishment of a parliamentary investigative committee... There are things that the public, and certainly MKs, have to know, such as whether the Bank of Israel Banking Supervision Department was aware for years that the Fishman was going bankrupt, and did nothing to make the banks collect their debt and NIS 22 billion that is still exposed. Furthermore, what is involved in not Fishman himself; it is the supervision of the banks and how the banks operate with tycoons, in comparison with an anonymous borrower."
Published by Globes [online], Israel Business News - www.globes-online.com - on June 19, 2017
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