Regulators to be forced to care for consumers?
New bill would rule that beyond their regular duties, Israeli regulators would be responsible for the welfare of consumers and for advancing competition.
On Sunday the cabinet will vote on a proposal that would change the very nature of regulation in Israel. The bill, in keeping with the spirit of recommendations handed down by the Trajtenberg Committee, would rule that beyond their regular duties, Israeli regulators would be responsible for the welfare of consumers and for advancing competition. That includes responsibility for lowering the country's onerous cost of living.
The committee, headed by Manuel Trajtenberg, was hastily convened following the summer protests over the cost of living. The bill is particularly pertinent to the supervisor of banks at the Bank of Israel and the insurance commissioner at the Finance Ministry.
Their job by definition is to maintain the stability of banks and insurance companies, respectively. They have no inherent incentive to increase competition because it could hurt the profits of the companies under their purview, and therefore, undermine stability. But if the proposal is enacted, they would have to do that very thing.
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