Kahlon: Bank reform is next step after cellular, TV

Minister Moshe Kahlon decries state of banking in Israel, says he will work to introduce competition into market.

Likud Minister Moshe Kahlon 311 (photo credit: Avi Hayun)
Likud Minister Moshe Kahlon 311
(photo credit: Avi Hayun)
Banks are the next industry in need of reform after cellular communications and television, Communications and Welfare Minister Moshe Kahlon said Wednesday.
“The weak do not have the strength to bargain, shout and influence,” he said during a speech at the Sderot Conference for Society. “The strong are those who receive the cheapest prices. The students are the ones who fund the tycoons.”
Kahlon, who is not running for re-election in January, stressed that he has nothing against tycoons but rather is motivated by a desire to help consumers.
“Every quarter the banks make NIS 1 billion,” he said.
“That money comes from the interest paid by the public. If they make NIS 100 million a year, is that not enough? That money comes from you and from your parents, and it is not earned honestly. Things can be done differently. Not one bank has been established in Israel for 60 years. Is that competition?” Israel has 15 active commercial banks, according to the Bank of Israel. Most were founded in the pre-state era or in the first few years following independence. The two youngest commercial banks are the First International Bank of Israel, founded in 1972 through the merger of several smaller institutions; and one of its subsidiaries, Bank Poalei Agudat Israel, founded in 1977 to cater to the ultra- Orthodox community.
As communications minister, Kahlon has overseen cellphone reforms that have opened the market to new players and drastically reduced prices. The next step in these reforms will be implemented January 1, when new regulations banning cellular providers from tying service contracts to the purchase of mobile devices come into effect.