Banking Leaders Express Concerns over Netanyahu’s Judicial Reform Plan

Bank of Israel/ Wikipedia

Israel’s Minister of Finance, Bezalel Smotrich met on Tuesday with the CEOs and chairmen of the banks in Israel as part of an introductory meeting with the members of the Bank Association. The meeting was held under the shadow of ongoing unrest in Israel over Prime Minister Benjamin Netanyahu‘s government’s plan for judicial reforms that would greatly reduce the powers of Israel’s Supreme Court and Attorney General. The controversy has financial leaders worried that the plan would harm investments in Israel as it would cause concern over its political stability.

The leaders of Israel’s opposition have called the plan a threat to Israel’s democracy and the Shekel has dropped considerably against foreign currencies in recent weeks. Several Israeli firms have already made plans to move their funds out of the country, the Governor of the Bank of Israel himself expressed his concerns over how the plan would adversely affect Israel’s economy and none other than major financial firms like JPMorgan and Goldman Sachs have issued statements expressing similar concerns.

And now the leaders of Israel’s banking sector – members of the Association of Banks in Israel – have said as much in a face to face meeting with Minister Bezalel Smotrich.

The government of Israel, in its press release on the matter, did not mention any such criticisms. It merely stated that at the meeting, the economic issues at hand came up for discussion. The heads of the banks presented an up-to-date picture of the situation and trends in the real estate market were discussed.

Israel’s Channel 12 news reported that at the meeting Uri Levin, the C.E.O. of Israel Discount Bank, told Bezalel Smotrich, “We see a tenfold increase in interest in opening savings accounts in foreign banks. The shekel is growing weaker, Israel’s risk factor is rising, and our stock exchange is doing worse than others around the world. The market is based on trust, and if we don’t stop it now we may find ourselves in a deep crisis.”

“We will bring a responsible, growth-based budget, which will include many reforms, we will not breach the budget frameworks and there will be no coalition funds in unusual amounts,” said Minister Bezalel Smotrich, skirting the ongoing political controversy.

“The best thing we can do today for the public in Israel is to lower inflation,” he added. “Economy is a world of expectations and the goal of all of us is to calm the discourse in the country. Israeli society is strong, the State of Israel will get through this crisis.”

Bezalel Smotrich went on to declare that the Israeli economy is strong in comparison to other economies.

As for the possibility of future instability, Bezalel Smotrich only commented, “In a world of instability, the State of Israel should be an island of stability.”