Hizkiyahu: More Credit for Banks, but No Salary, Dividend Restrictions

The banks had mixed responses to the Finance Ministry and Bank of Israel plan to provide them with NIS 6 billion in guarantees to let them raise capital and grant more credit.

After the plan was announced, the banks shot back that they did not need an agora of public money, and that it was the state that needed the bank's help to rehabilitate capital markets.

However, there is a large degree of disagreement between the banks over whether the plan is indeed necessary, and the banks' owners have yet to weigh in on the issue.

The Bank of Israel's Supervisor of Banks, Rony Hizkiyahu, said yesterday: "This plan combines the county's needs and the good of the banks. The financial side of the crisis is not yet over."

He said the banks have nothing to fear from increased government involvement, as they had common interests and the state was only interested in offering them cheaper sources of funding.

He also said the banks should not worry that the central bank was interested in limiting bankers' salaries or dividends.