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When people speak of the "Brodet Commission," what usually springs to mind is the 2007 report recommending that the army tighten its belt. But David Brodet, former director-general of the Finance Ministry, wrote another report in 1995 that advised divesting the banks of their nonbank holdings. As a result, Bank Hapoalim was forced to sell its controlling interests in Koor Industries and Clal Industries. Bank Leumi was forced to forgo its controlling interests in Africa Israel Investments and the insurance company Migdal, as well as holdings in the Israel Corporation and Paz Oil.

If not for Brodet 1995, the Israeli economy would look very different. The economy had been ground underfoot by the Histadrut labor federation, the Recanati family (which controlled IDB) and banks Hapoalim and Leumi. But following the bank shares manipulation scandal of 1982, the Recanatis lost control of IDB; then the two big banks lost their nonbank holdings.

Out of the ruins of the old concerns, and thanks to the weakening of the two big banks' power, a new, vastly more competitive Israeli economy arose. But it is still dominated by a few powerhouses. Looking back, one has to wonder why Brodet divorced the banks from the great concerns but didn't divorce the great concerns from the banks: In fact, they own them.

Hapoalim sold Koor and Clal, but it belongs to the Arison group, which owns Housing & Construction. Bank Mizrahi-Tefahot is owned by business giants Yuli Ofer (whose family owns Israel Corp.) and Mozi Wertheim, who owns Coca Cola Israel and Channel 2 concessionaire Keshet. First International Bank is owned by Zadik Bino, who also owns Paz Oil and the Ashdod oil refinery. So the banks sold their nonbank holdings but were themselves acquired by conglomerates.

Now let's look at the insurers. In 1995, they focused on insurance and nobody devoted any thought to them. In 2010, they compete with the banks in lending to business and belong to the giant corporations. Clal Insurance belongs to IDB and Phoenix belongs to Delek Group.

Fifteen years after the first Brodet Commission, Israel has shaken off the shackles of the two big banks, but finds itself trapped in the net of the great tycoons. The Brodet Commission aimed to improve the economy and increase competition, and yes, the economy is different. But it isn't better. Domination of one sort was replaced by domination of another sort, which may even be worse.

In its annual report for 2009, the Bank of Israel issued broad hints that the economy remains dominated by a handful of bankers and tycoons. It spoke of "mutual relations" between the banking sector and business groups and of interlocking directorates where the same people sit on multiple boards of directors.

The central bank was explicit in its opinion of these tycoons, saying the Israeli economy is influenced by the "whims of a few people." The danger they pose was also stated loud and clear - "systemic risk." Finally, the report clearly hinted that ties between the tycoons and the banks undermine fair competition. Now, it has declared war on the tycoons - proposing a tax on dividends, and suggesting their holdings in various companies be limited to 30%. They may choose, the bank suggests: either finance or industry, but not both. Fifteen years later, the Bank of Israel is finishing the job that Brodet left undone.