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(photo credit: Ariel Jerozolimski)
Attempts by Israel's banks to find support to halt the proposed Knesset legislation on bank fees failed Tuesday evening after Bank of Israel Governor Stanley Fischer signaled that he would not act against the process.
In an urgent meeting called by the heads of all of Israel's banks with Fischer to discuss bank fees, the banks did not succeed in swaying the governor to help them to act against the proposed legislation.
The banks realized they must take action after a speech by Fischer last month before the Association of Banks, in which he criticized the bank fees and expressed his dissatisfaction with the banks.
"Fischer is committed to the two-month time-out that has been agreed upon in the handling of MK Gilad Ardan's bill, while the Bank of Israel revises a draft bill for the supervision of bank fees from 2004," said a source close to the talks.
Back then, former Bank of Israel governor David Klein initiated the bill, which was never submitted for legislation. The bill proposes granting the supervisor of banks the authority to oversee and set bank fees. The recommendations of the revised draft bill are understood to go much further than the current bills put forward by Knesset members in an attempt to provide a broader solution for the decentralization and the encouragement of competition within the banking system.
In a recent interview with The Jerusalem Post, Fischer said the best way to change the fees was more competition.
Possible ways of increasing local competition and bringing more players into the market could include the entry of on-line banks, expansion of the Postal Bank and the entry of foreign banks into the market.
On Monday, the Knesset Economics committee announced its support for reform within the banking industry, which would include decentralization of the top banks, elimination of fees and greater transparency for customers.
During a 90-minute session, the committee began to review the legislations proposed by MK Amnon Cohen and MK Ardan, which would limit the ability of banks to impose fees on customers. Among other initiatives, the proposed legislations suggest third-party supervision over fee increases, as well as banning certain types of fees altogether.
Bank fees became a hot topic last month after Bank Leumi, Bank Hapoalim and Israel Discount Bank announced plans to raise many of their charges.
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