The Bank of Israel said on Monday that it supports the entrance of the country's two largest banks, Hapoalim and Leumi, into the pension consultancy field after studying the Finance Ministry's proposal to delay their entrance into this sector and after holding discussions with representatives of small and medium-sized banks. In January the Finance Ministry's Supervisor of Insurance and Capital Markets, Yadin Antebi, put a hold on the banks' entrance into the pension sector to allow the medium and smaller banks to establish themselves in the market before Hapoalim and Leumi were unleashed. Antebi's proposal, however, was met with criticism. "The initiative of Antebi to limit the banks' service on pension consultation to the self-employed and to delay the entry of the two large banks into pension consultancy is an example of erroneous regulation, which is bound to significantly damage the economy and the public in the long-term," said Bank Hapoalim's CEO Zvi Ziv earlier this year. Ziv's remarks were part of the big banks' attack on Antebi, and he claimed that Antebi's initiative undermined the principles of the Bachar reforms, designed to allow Hapoalim and Leumi to start selling pension advice only after they sold their holdings in provident and mutual funds, which they complied with. Bank Hapoalim had invested NIS 50 million and hired 300 investment advisers last year to prepare to sell pensions, and according to Ziv, the big banks' growth strategies were based in large part on pension consultancy. The Bank of Israel noted in its statement on Monday that there is serious concern about the preparedness of the small and mid-sized banks to offer pension advice to a large number of employees, especially in the outlying areas of the country. The bank also believes that not only will the Finance Ministry's proposal delay the development of the market for pension planning, but the overall availability of general financial information and service offered to customers will be adversely affected. Additionally, the Bank of Israel doubts whether the postponement of the "big banks'" entrance into the field of pension advice will lead to a reduction in their dominance or an increase in competition in the banking system, as Hapoalim and Leumi will develop alternative products to offer their customers and when they finally do enter the pension market, many of their old customers will return. Gaby Fiszman, Chief of Staff to the Governor of the Bank of Israel, explained that the Central Bank only arrived at this conclusion following a thorough review of the Finance Ministry's proposal which was carried out by a team of experts from the Banking Supervision Department, as well as meeting numerous times with representatives from the ministry to discuss their decision. "Despite the fact that we respect the Bank of Israel's decision, we do not agree with their decision or the arguments which they set forward," said the Finance Ministry spokesman on Monday. The ministry additionally stated in its official response that if Bank Hapoalim and Bank Leumi were to offer pension-related services, it would doom the small and mid-size banks with pension advisory programs as they will ultimately not be able to compete with the services and standards of the big banks. The ministry concluded therefore that they will not allow the two banks to offer pension consultancy in the foreseeable future. Under the law, the Finance Ministry must consult with the Bank of Israel before making any banking- related decisions. However this decision ultimately rests with the ministry as pension-planning falls under their jurisdiction.