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The titanic struggle between the Bank of Israel and Shari Arison, the billionaire owner of Bank Hapoalim, is over. Danny Dankner is stepping down as chairman of the bank, effective within a few months. Yair Seroussi, chairman of the investment committee of pension fund Mivtachim, has been named vice chairman, and is slated to take Dankner's post when he leaves. Seroussi is also a board director at several large Israeli companies.

Under the compromise hammered out by the Bank of Israel and Arison, Dankner will stay at the bank for two more months. Before he goes, however, Chief Executive Zvi Ziv will make his departure.

The Hapoalim board was urgently convened yesterday to discuss the compromise reached between Arison and the central bank. The package deal did not pass unanimously. The tempestuous board meeting lasted more than four hours.

Some of the directors objected to Ziv leaving and Keinan, head of corporate banking, replacing him as acting CEO while he could, at the same time, apply to the search committee for consideration as permanent CEO. The directors felt there was no need for Ziv to leave right away, as Arison has hinted she would prefer. He should stay until a new permanent CEO takes the reins, they felt.

Ziv's resignation announcement, the day before Bank Hapoalim published a sorry financial report for the year 2008, was addressed very briefly by the bank's board of directors. In fact, the board at the time spent less than three minutes discussing the circumstances of the CEO's resignation (differences with Dankner) and not much more than an hour discussing his successor - Zion Keinan.

This latest series of events: Ziv's abrupt resignation, the board's inattention to the reasons underlying it, the choice of Keinan and the manner in which Keinan was chosen - without an executive search committee, prompted the Bank of Israel to intervene. Citing nine different affairs in which the board had conducted itself improperly, the Bank of Israel suggested, then demanded, that Dankner go.

Last week Hapoalim and the central bank finally agreed on terms for a search committee to operate under. Keinan will serve as acting CEO until a new one is chosen.

Even before resigning, Dankner confided to associates that he was tired of the battle over him. He'd stopped smoking in early 2008, maintained his abstinence from nicotine through the scandal of Bank Hapoalim losing over a billion dollars on mortgage-backed securities, but resumed the habit after Bank of Israel governor Stanley Fischer began calling for his head.