New Rule Targets Trade Bank-like Scams

Senior bank execs required to take 12 consecutive vacation days, regularly rotate roles

Senior bank managers from now on will be required to take at least 12 days of consecutive vacation every year, according to new rules issued yesterday by the Bank of Israel's Supervisor of Banks in an attempt to prevent a repeat of the embezzlement scam that led to the collapse of the Trade Bank.

An investigation into that scam, which came to light some 18 months ago, revealed that the embezzler, Etti Alon, used to come to the branch where she worked on her days off, without punching her time card, which helped her conceal her thefts.

The new rules require senior managers to take at least 12 days of continuous vacation and junior managers to take seven days, during which time they will not be allowed to enter the premises. Furthermore, they may not be replaced by employees of the same branch or unit during these periods to prevent a corrupt manager from replacing himself with someone who will cover up his misdeeds.

Finally, the banks will have to institute a rotation policy for senior managers and those in sensitive positions to ensure that one manager cannot stay in the same job and embezzle undetected for years, as Alon did.