No Soft Landings

Since Bank Hapoalim's privatization in 1997, every CEO and chairman has ended badly. Shlomo Nehama and Eli Yones were fired from one day to the next. Amiram Sivan and Zvi Ziv were tormented until they had to quit.

True, Danny Dankner isn't being ousted by the bank's owner, but his case is just as ugly. This time the hangmen are Bank of Israel Governor Stanley Fischer and supervisor of banks Rony Hizkiyahu, who are fed up with the way the bank's board was run under Dankner. They lost faith in the chairman. But he's also paying the price for the bank's tradition of getting rid of the people at the top.

Dankner is the first bank chairman since the bank-shares scandal of the early 1980s to be forced out by the Bank of Israel. But the managers there were caught in criminal activities. Dankner hasn't been accused, let alone convicted, of anything. Also, then the Bank of Israel took its sweet time, acting only after great damage had been caused. This time it took action after seeing indications that the Hapoalim board of directors was dysfunctional. We'll never know what would have happened at Hapoalim had Dankner stayed on: The Bank of Israel decided to spare the bank and us all from that knowledge. Time and again as the economic crisis of 2007-2008 unfolded, the public cried out to the regulators struggling to stabilize the banks: "Where were you?" With their drive to oust Hapoalim's chairman, Fischer and Hizkiyahu acted sooner rather than later. In either case, nobody will thank them. When regulators act late, everybody complains that they should have acted sooner. When they act just as the flames start to rise, they're "abusing their power."