stanley fischer 88.
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Israel's large banks agreed Monday to widen credit frameworks and accept uncovered checks from citizens and small- and medium-sized businesses in the North that have found themselves in a liquidity crisis because of the security situation.
"We need to make sure that the residents of the North, who are subjected to an attack of rocket barrages, will not be hurt economically and will not have to pay the price of the war on the day after," said Dalia Itzik, chairwoman of the Knesset during a forum with the heads of the country's largest banks, the Governor of the Bank of Israel Stanley Fischer and Yoav Lehman, Supervisor of Banks.
"We need to make possible the delayed payment of mortgages, while credit and loan policies for residents of the North need to be more flexible to enable them to recover from the economic blow that they experience because of the security situation."
The banks pledged to inform all their banking branches about the flexibility regarding credit availability and credit frameworks for the affected residents and businesses.
Reacting to the dissatisfaction of manufacturers and small business owners in the Galilee with the compensation deal, Shraga Brosh, chairman of the Office for Coordination of Economic Organizations, said he was in advanced talks with the Finance Ministry to establish a NIS 1.2 billion loan fund to help small- and medium-sized businesses. Brosh noted that, to date, the war had cost the business sector about NIS 9b. or 1.5 percent of gross domestic product.
The loan fund would provide loans for companies with revenues of up to NIS 30m. a year, which would cover 50% of their annual trade volume. Brosh said most banks already had agreed to the loan fund and that the government would transfer NIS 200m. to the banks.
Following Sunday's protest in Jerusalem of hundreds of small business owners demanding compensation packages similar to those offered to the tourism industry, which provide for compensation for lost revenue, the Finance Ministry said on Monday that the deal signed on July 27 would not be altered.
"The compensation package, including indirect damages, which aims at providing a simple and swift solution for the residents in the North under the current circumstances, cannot give an answer to all the needs of all the negatively affected," the ministry said in a statement. "The deal provides a swift solution for 90,000 businesses."
Separately, the Manufacturers Association of Israel said 88% of the factories in Haifa and the North were fully or partially in operation, compared with a week ago when 75% of factories were fully or partially open and 25% were closed. Still, the direct financial cost of the hostilities in the North to the manufacturing industry had come to NIS 3.7b. because, during the first week of the war, 47% of factories were fully or partially open and 53% were closed.
The Manufacturers Association reported that, since the start of the war, the grounds or structures of 20 factories had been damaged by direct hits from Hizbullah rockets.