Israeli Activists to Hold Day of Rage Against Banks

Organizers accuse Bank of Israel governor of 'acting like a lobbyist' for Israel's banks; Day of Rage will include demonstrations on Rothschild Boulevard in Tel Aviv.

One of the organizers behind Thursday's Day of Rage protests against local banks has accused Bank of Israel governor Stanley Fischer of "acting like a lobbyist" for the banks and allowing a business clique "to exploit the public for years."

Day of Rage coorganizer Idan Miller told Haaretz on Wednesday: "When Fischer spoke to the Knesset Economic Affairs Committee this week on how the interest rates Israeli banks charge are higher than those charged by overseas banks, he behaved as if he were chairman of the Association of Banks in Israel. Moshe Pearl, the CEO of the association, could not have done it any better."

The Day of Rage against the banks will include demonstrations on Rothschild Boulevard in Tel Aviv, scheduled to take place at the same time that the banks are expected to release their financial reports for 2011.

Miller - who is also a leader of the JointCamp protest movement - said the banks are the center of the Israeli economy, but the Israeli banking system has been anticompetitive for years and is controlled by the wealthy.

"There is a closed clique of 20 or 30 people that operates almost like the mafia. But we don't have any complaints against this clique - the banks' goal is to maximize their profits and that is okay. Our problem is with the governor of the Bank of Israel, Stanley Fischer, who has allowed them to exploit the public for years," said Miller.

The organizers of the protest want regulators to limit the interest rates that banks may charge customers for credit. "We are in an election year," Miller said. "The power is moving into our hands - the consumers - and we must take advantage of it."

Miller added that politicians understand that they can reap dividends from supporting steps against the banks, and it is possible to cut the interest the banks charge customers by about half. This could be accomplished within two months using existing regulatory powers with no need for new legislation.

Protest leaders met Wednesday with senior officials from the Bank of Israel and presented their demands. The leaders said they were surprised when Odeda Peretz, deputy supervisor of banks, told them to "take advantage of the Day of Rage and call for the public to take action against the banks."

Peretz said the regulators could not solve all the market failures by themselves and needed the public's help. "The public must check, rebel and bargain with the banks. That is the only way we can create real competition in the banking sector," she said.

The interministerial committee examining competition in the banking industry was scheduled to release its recommendations before the Passover holiday at the end of next week. But the protest leaders were told at Wednesday's meeting with the central bank officials that the recommendations will only be released in two months - or possibly even later.

The report will not include any major steps to increase competition, said Sonia Bogolovski, head of the bank-customer relations division of the Banking Supervision Department. "The recommendations will not include limiting interest rates with regulations, separating the credit-card companies from the banks or increasing credit to households by insurance companies. But the recommendations include a list of steps to increase competition that will lead to lower prices," she said.

Israelis protest on Rothschild Boulevard in Tel Aviv against the banks in January - Moti Milrod
Moti Milrod