Wednesday, September 27, 2023
HomeEconomyIsrael watchdog asks banks for data on rate probe

Israel watchdog asks banks for data on rate probe

By Steven Scheer

JERUSALEM (Reuters) – Israel’s competition watchdog on Sunday demanded more data from the country’s banks in connection with an investigation, saying they had moved from a higher Huge profits are made in the loan interest rate but the benefits are not fully shared with customers.

The investigation began at 2022 and was not made public until Sunday.


In order to curb inflation, the Bank of Israel last week raised its benchmark interest rate by another 25 basis points to 2006 The high point is 4.25%, it continuously continuously raised the key interest rate to 0.1% in April last year . Ministerial Panel on the Matter.

Mortgage and loan payments, usually linked to inflation and central bank interest rates, have in turn surged. That sparked public outrage, even though it meant record profits for the bank and a tidy dividend for its shareholders.

The top five banks made a combined profit of 6.3 billion shekels ($1.7 billion) in the first quarter of 2018.

The Competition Authority says banks have been slow to pass on the benefits of higher interest rates to customer deposits.

Israel’s aggressive austerity cycle has fueled the ire of its citizens as mortgages, loan payments and living costs soar and inflation remains stuck at around 5%.

The Competition Authority, formerly the antitrust agency, said it had launched an investigation in 2022 when rates started to rise and, based on preliminary results, last week requested Banks provide more data. It declined to provide details of any possible disciplinary action.

Israel’s banking regulator played down the issue. Bank chief Yar Avidan told reporters last week that the 82% hike had been passed on to customers. Still, he said many customers were unaware they could open interest-bearing accounts and urged banks to educate customers.

Last week, Economy Minister Neil Barkater demanded the resignation of Competition Authority chief Michael Cohen, saying she was the main reason for rising prices in the economy because the authority was not doing enough to confront monopolies. Cohen refused to resign.

Barkater said authorities “must conduct this investigation focused, quickly and efficiently because until it is completed, the public will lose.”

($1=3.6280 shekels)



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