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1. In three years' time, Shlomo Nehama will be thanking the supervisor of banks on bent knees.

The supervisor of banks? Isn't he the most hated person in Israel's banking sphere, especially at Bank Hapoalim? Isn't he the man embittering their lives, impeding their moves, pricking the bubbles of their entrepreneurial spirit? Isn't he the one shooting off one directive and regulation after another, which sometimes barely keep up with the breathless pace of events?

Yes, he's the one Nehama will be thanking - in the secret depths of his heart, of course.

The other day Bank Hapoalim announced it is selling all its shares in the subsidiary it launched five years ago in New York, Signature Bank.

Hapoalim's chiefs explain the supervisor of banks is forcing them to sell it because he won't let Hapoalim reduce its stake below 50 percent. You can have 50 percent or more, or zero, he ruled.

His directive meant Hapoalim couldn't do as it wished, which was to pursue growth through mergers and acquisitions. That is because any meaningful merger would have diluted its stake in Signature Bank below 50 percent, or required Hapoalim to invest hundreds of millions of dollars in it.

There is of course one question the bank isn't talking about. Why does it "have" to carry out more mergers and acquisitions? Because Signature recently achieved the extraordinary market capitalization of a billion dollars, three times its shareholders equity, which indicates the market expects it to grow fast, which is a very hard thing to achieve.

The Hapoalim head honchos grasped that what they had in hand was a bubble of expectations. The usual way to handle that is to effect M&A that dilute the shareholding. If you have a shareholding that has become inflated due to unrealistic expectation, then use it as currency to go shopping.

If the supervisor of banks had allowed Bank Hapoalim to reduce its stake below 50 percent, then the New York bank would have hastened to carry out M&A through stock swaps.

Of course, it is possible that M&A would not have solved Hapoalim's problem. Usually, when one pays for rapid growth with inflated shares, what you get is other inflated shares. Most M&A fail, mainly the ones driven by inflated share prices.

But along came the supervisor of banks and solved Hapoalim's problem. Instead of a series of iffy M&A to justify the inflated expectation, Hapoalim is "forced" to sell Signature and take its money home.

True, for the power-hungry imperialists running Hapoalim, the thought of selling a big asset like Signature is hard to take. But at the end of the day, it's the best outcome the shareholders could wish for.

Being able to leave the table with fat profits in hand is a rare quality among businessmen.

2. "The big question," a big banker at a big bank remarked two years ago, "is what will happen when the economy starts to grow again and the banks start to compete again. Will we remember the lessons of the credit crisis, or make the same mistakes?"

That isn't the question, sir, that's the answer. The credit department of the big banks know it, too. Again the competition between the banks is leading them to lose their heads, the capital market is boiling hot, and they're competing to see who can give the least sensible spreads.

Some bankers may already be feeling pressed to explain themselves. One said this week that they have a new "patent" to avoid more trouble with big borrowers. The credit committee demands they provide a "personal wealth statement", he explained, as a precondition for the loan. If the banks had demanded declarations like that in the past, he exclaimed, they'd never have found themselves stuck with so many bad loans.

As we said, they have learned nothing. Exactly six years ago Gad Zeevi gave First International Bank a report commissioned from the distinguished bank Credit Suisse, showing he was personally worth half a billion dollars.

There was only one little snag: it turned out the half-billion dollars didn't belong to Zeevi. That Swiss bank account had another signatory, a lawyer whose client turned out to be Mikhail Chernoy.

What did we learn from that Bezeq of Zeevi and Bezeq? That people who give big loans to buy shares based on stock market values, without checking the ability of the borrower to return the money from cash flow, is taking a big risk. And anybody willing to increase that loan and risk because "the market" is willing to give money instead, may find that the market can reverse, but he'll be stuck with the loans.