stanley fischer pointing.
(photo credit: Ariel Jerozolimski)
Governor of the Bank of Israel Stanley Fischer is urging the Finance Ministry and the central bank's labor representatives to help put an end to the year-long wage dispute saga at the central bank as international financial institutions are beginning to raise concerns about the situation, which could damage the reputation and international relations of the bank.
"My plea is an attempt to prevent the embarrassing labor disruptions at the central bank and an effort to prevent the damage that could be caused to the central bank's image and relations with banking systems and financial institutions here and abroad and to the economy," Fischer wrote in a letter addressed to Eli Cohen, the Finance Ministry's Director of Wages, Finance Minister Avraham Hirchson and Chairman of the Bank of Israel Union Rimona Leibowitz.
Fischer called upon all sides to immediately announce that they would cease unilateral actions, and strive to close a deal on new employment terms in order to sign the new employment contract at the Bank of Israel quickly.
In reaction to Fischer's letter, Cohen provided the Bank of Israel and central bank's employee representative with a last opportunity to respond within 30 days to the irregular work arrangements, agreements and customs in the bank including the demand by the treasury to claim back all the irregular benefits of the past years.
Last Wednesday, Bank of Israel employees declared a work slowdown over the wage dispute, saying they would refuse to conduct monetary tenders used to supply banks with cash and won't provide information to commercial banks and management. The action is in protest of the Finance Ministry's refusal to approve the bank's new wage agreements on the grounds that there were salary irregularities and exaggerated benefits to workers.
The Finance Ministry has been arguing for months that certain Bank of Israel officials had been receiving excessive pay and benefits for years, and is demanding the retroactive return of excessive benefits. In addition, State Comptroller Micha Lindenstrauss said in a report in April 2006 that bank employees had received excessive benefits.
In his letter, Fischer pointed out that since he joined the Bank of Israel relations at the bank had improved and sweeping reform had commenced, under which agreements raising the mandatory education of workers had been signed.
Furthermore, he said, appropriate pay levels had to be preserved in order to maintain the professional quality of the central bank workers and compete with the private sector over talent.
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