Minister of Finance Bezalel Smotrich held a discussion yesterday with the heads of the banks in Israel, who sought to talk to the minister about the reforms in the annual Economic Arrangements Bill that relate to the banking sector. Towards the end of the meeting, the discussion veered towards the judicial reform that the government is promoting, and that the minister of finance supports, despite warnings from bankers and economists.
Sources close to Smotrich said, "A very businesslike discussion took place about the legal reform for a few minutes. Someone expressed his opinion, and the minister also expressed his opinion, but it was an excellent meeting." Earlier this week, the heads of the banks declared that they supported the initiative of the president to bring about dialogue and the achievement of broad consensus on the reform in the legal system.
The meeting mainly dealt with the Ministry of Finance’s plans for this fiscal year, such as setting up a committee to promote competition in the financial system. The committee will examine ways of removing barriers to entry for new players, and of changing the regulatory structure. Supervisor of Banks at the Bank of Israel Yair Avidan, who recently announced that he would step down, also participated in the meeting.
In statement issued after the meeting Smotrich said, "The economic issues on the agenda were raised. The heads of the banks presented an up-to-date picture of the situation, and trends in the real estate market were also discussed."
Smotrich sought to allay the bankers’ fears about the forthcoming state budget. "We shall present a responsible, growth-orientated budget that will contain many reforms," he said. "We won’t exceed the budget framework and there won’t be money for the coalition parties in excessive amounts." This follows Smotrich’s statement to the prime minister the other day to the effect that the various ministers would have to compromise on their budgetary demands.
"The best thing that we can do today for the Israeli public is to bring down inflation," Smotrich said. "The economy is a world of expectations, and the goal of all of us is to calm the discourse in the country. Israeli society is strong, the State of Israel will get through this crisis. The Israeli economy is strong; look at it even in comparison with other economies. Israel’s macro numbers are outstanding, not just in our forecasts, but in those of the IMF and international institutions as well, and in comparison with other countries too. In an unstable world Israel needs to be an island of stability."
Israel Discount Bank CEO Uri Levin said at the meeting that there were signs of the beginning of a crisis, among them the weakness of the shekel, a rise in Israel’s risk premium, and weakness in the stock market. Levin said that the he did not know how fast the crisis was developing, but that it was important to create a track for a solution and a compromise as quickly as possible.
Also present at the meeting, which was described as a "getting acquainted session", were Bank Hapoalim CEO Dov Kotler, Bank Hapoalim chairperson Ruben Krupik, Mizrahi Tefahot CEO Moshe Lari, Mizrahi Tefahot Bank chairperson Moshe Vidman, Israel Discount Bank chairperson Shaul Kobrinsky, First International Bank of Israel CEO Smadar Barber-Tsadik, First International Bank of Israel chairperson Ron Levkovich, Bank of Jerusalem CEO Yair Kaplan, HDBS Israel CEO Michael Israel, and Association of Banks in Israel CEO Eitan Madmon.
Published by Globes, Israel business news - en.globes.co.il - on February 15, 2023.
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