The three main supervisory bodies have signed a memorandum of understanding to maximize coordination between the regulatory agencies in an effort to improve the quality of supervision in a diversifying financial market following the Bachar reforms and to conform to international standards of best practice.
As part of the memorandum of understanding, which was signed on Monday between the Commissioner of Capital Markets, Insurance and Savings, Yadin Antebi, Supervisor of Banks Rony Hizkiyahu and Chairman of the Israel Securities Authority Moshe Terry, a commission will be established to meet at least once a month to discuss changes and trends in the financial markets.
The aim of the commission is to exchange information to encourage cooperation and to make supervision across the Israeli financial markets and sectors more efficient as well as strengthen the trust of investors in these markets.
Back in May, Hizkiyahu, had called for the consolidation of supervisory bodies to harmonize oversight across the banking and in particular the non-banking or insurance sectors.
"The banking sector is a regulated field with clear lines, referees and rules while the non-banking sector is like an amateur field played without rules. Regulatory policymakers should cooperate to establish a system of greater uniformity, in order to determine the regulatory limits," said Hizkiyahu. "Today, there is no such balance and we will be doing everything to maximize coordination between the supervisory agencies. In the future, this coordination should lead to the consolidation of the agencies and uniform supervisory rules for the financial system."
Antebi agreed with Hizkiyahu that the insurance sector today was facing the management of high risks.
"I very much believe in the importance of the supervision of the insurance market and the establishment of one single financial supervisory authority for the capital market, which would act as an umbrella body under which all capital market players would be supervised like the Financial Securities Authority in the UK for example," he said.