MK: Need for public c'tee on concentration of economic powe

Stanley Fisher: 'About 20 business groups control half of Israeli market.'

By SHARON WROBEL
July 6, 2010 08:22
1 minute read.
MK Moshe Gafni

MK Moshe Gafni 311. (photo credit: Courtesy)

 
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The government should establish a public committee to address the high level of concentration of power in the economy, Knesset Finance Committee chairman Moshe Gafni said Monday.

“There is a very small number of people or families who have access to many businesses and who own a large share of the economy,” he said at his committee’s meeting. “They also control the communications sector. At any time in the future this group of people may be able to run the country because any decision they take could lead to a crisis. It won’t be possible to control or criticize them because these families also own the media. Such a situation is frightening.”

Gafni said the government must establishes a public committee or else private-member bills would be advanced to address the issue.

“If the government establishes a public committee, we will cooperate,” he said. “If not, we will continue to discuss and advance other proposals on our own, which the government does not like. As a state, we cannot ignore the issue.”

At the committee meeting, MKs also said a public committee should examine the separation between ownership of real companies and financial institutions and the appointment of directors by the public.


In recent months, some MKs have called for legislation to regulate and reduce cross-ownership by families that control both financial firms and industrial companies, which they say is stifling competition.

Last month, Bank of Israel Governor Stanley Fischer warned that the high level of concentration of power in the economy could harm competition and the financial system.

“Israel’s economy is a highly concentrated one compared with other economies,” he said. “About 20 business groups control half of the market in Israel. This has implications for the degree of competition, and in certain situations could damage the financial system.”

“The supervisor of banks monitors this area closely, and the constraints he imposes on the degree of concentration in banks’ credit portfolios are intended to address this issue,” Fischer said. “The handling of this matter must be based on exact data and correct information, and on a thorough analysis of the implications of all proposed solutions, and not on unfounded populist rhetoric.”

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