Taking Stock / Ilan Cohen and Mrs. Cohen
Have you heard of Ilan Cohen?
No, he isn't the husband of the "every man" Mrs. Cohen from Hadera, the stereotypical Israeli housewife who has come to represent the little-man investor who understands nothing about financing, who always does what the bank clerk suggests, and who always gets royally screwed.
Mrs. Cohen probably hasn't heard of Mr. Cohen either. In fact, few people have, because since taking on his powerful job, Ilan Cohen, the director-general of the Prime Minister's Office, has remained studiously low-profile.
But his time has come. As the banks and treasury battle over the Bachar reform, the low-profile Mr. Cohen is likely to sway the day.
The banks like to pretend that the Bachar team is a bunch of bureaucrats who came out of nowhere and shocked the marketplace with outlandish recommendations for reforming the banks and capital market. Nonsense. They are a team of professionals who have been swimming in the capital market like fish for years.
Many of the recommendations made by the team, which was headed by treasury director-general Joseph Bachar, are based on recommendations made by previous panels over the years. They are based on established economic theory and on reforms carried out over decades in the West.
The Bachar team experts listened to every last personality in the capital market. They listened to the bankers, from big to small, to the insurance companies' managements, to the people running the pension funds, in fact to anybody who wanted to present a valid case.
After hearing everybody, they consolidated their recommendations and submitted them to Finance Minister Benjamin Netanyahu. The intention was for the report to be submitted to cabinet for a vote without delay.
The `B' shelf
Since then, the Bachar report has been sitting in the Finance Ministry freezer. That is okay, because things in the freezer can be taken out, defrosted, and served. There could be worse alternatives, such as filing the report, or, heaven forbid, putting it on that dreaded "B" shelf, where the Bejsky report and Ben-Bassat reports I & II have sat for years gathering dust.
Now the banks are calling for a "public debate." What exactly is a public debate? Are the four "experts" they flew in from the U.S. before Rosh Hashanah a "public debate"?
The four Americans received a few tens or hundreds of thousands of shekels to fly over here, attack the Bachar report but - for the sake of proper disclosure - they noted that they hadn't actually read the Bachar report nor did they actually know much about the Israeli capital market. Are they the "public debate"?
Or is the "public debate" the behind-the-scenes Talks with Knesset members, some of whom are scared of the banks, or the Talks with politicians, who are naturally in awe of the banks' tremendous clout, or the Talks with the director-general of the Prime Minister's Office?
Ilan Cohen's problem is that he's not a politician. He's not a member of the Likud central committee. He's not a wheeler-dealer like Avigdor Yitzhaki or Shimon Sheves, his predecessors, who spent no small amount of their time match-making between the fat cats and the political echelon, while making some fine contacts for their private lives later on.
Cohen is a professional. He established the strategy consultancy POC, and he knows a thing or two about competition and marketing.
Cohen goes to school
But Cohen is in a dilemma. Above him is a prime minister who is also afraid of the banks, and who may want to use the Bachar report as a hostage in his political battle with Benjamin Netanyahu.
Crowding on his left and right are the bankers, who see Cohen as a weak link in the chain who could help them bury the report, or at least castrate it. For instance, maybe he could help get rid of that terrible recommendation forbidding the banks to take kickbacks from the companies managing the provident and mutual funds in the future.
Meanwhile Cohen isn't talking. He hasn't granted interviews to the press for a month now. All he'll say is that he's studying the issues.
But the truth is that as a pro who's true goal is to help the economy, he may yet tell the bankers something loud and clear:
Gentlemen, he may tell them, the team that convened consisted of seven experts on the capital market, on law, on corporations, and on banking. It was a team backed by dozens of professionals from the four most professional institutions in Israel. And it is not my job or anybody's job to establish another team to discuss the conclusions of the first team.
After all, why did we establish the Bachar team? he may say. In order to provide the groundwork for yet another team? It is legitimate for the prime minister to thoroughly study the matter, as long as it isn't just a way to bury the report.
It is possible that the political bartering process will force the team members to negotiate implementation with the bankers. It would be better to reach common ground with them, even at the cost of a few slight compromises, but no more.
Ilan Cohen has to decide what legacy he wishes to leave behind him. Will he continue in the footsteps of his predecessors, who often served as a conduit into the Prime Minister's Office for cronies? Or will he prove to be a new type of director-general, who views the Jerusalem professionals as his partners, not his enemies?
In other words, Ilan Cohen has to throw a switch in his head. When running POC, the biggest corporations in Israel were his clients. Now he has one little client, that's all, one little client who has little understanding of what's really going on: Mrs Cohen from Hadera.