Fischer attacks: Banks exploit the poor and undercharge the wealthy
Bank of Israel governor tells TheMarker: Big business gets credit too cheaply
Bank of Israel Governor Stanley Fischer thinks that Israeli banks are too kind to the rich and too hard on ordinary families.
In an interview appearing in this Friday's Haaretz Magazine, Fischer said: "The banks' profits from companies are very low compared with the international scene, but their profits from households are high."
According to Fischer, this is the root of the feelings of anger and exploitation experienced by ordinary account-holders.
"In comparison to the international sphere, the big companies get credit at very good terms," he said. "Someone else pays for that. It's a case of cross-subsidization. The margin in one sector would appear to fund the margin in the second sector and subsidize it."
Do the banks in Israel behave as though they are a cartel?
"Your question has legal implications and therefore I am unable to reply to it. We need to take into account that when there are very few players in the market, it's difficult for them to behave in a manner that looks competitive."
What are you, as governor, doing about this?
"I'm trying to bring in a foreign bank. Every time I am abroad, I go to the chairmen of the big banks and try to persuade them to open a branch here. If we succeed in getting foreign banks to work here on the retail side, it will be a major accomplishment for the country. That will solve the problem."
The complete interview appears in the Friday magazine.
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