Why Bother?

President of the Jerusalem District Court Vardi Zeiler, who is chairman of the commission looking into the safety of buildings and public places, made it clear

President of the Jerusalem District Court Vardi Zeiler, who is chairman of the commission looking into the safety of buildings and public places, made it clear

this week that although the Versailles wedding hall disaster prompted the commission's establishment, the panel would not single out the incident but would probe it in the same manner as a number of past disasters. "Based on the experience of earlier public commissions, I am not completely certain the enquiry's recommendations will be implemented," says Zeiler.

What makes Zeiler so frustrated? What experience is he talking about?

In order to answer this, we need to look back to the scandal of the bank share collapse in October 1983. Following the disastrous collapse, the Beisky Commission was set up and published its recommendations after meeting for a little more than a year. On the individual level, the commission recommended the dismissal of those senior bankers responsible for manipulative regulation of the shares as well as the sacking of the governor of the Bank of Israel. On the institutional level, the recommendations called for significant structural changes in the banking system. The individual recommendations were adopted, however, the institutional proposals still have not been implemented. Zeiler was one of five members of the Beisky Commission.

The Beisky panel understood that in order to prevent a similar scandal from recurring, significant changes in the banking system would be required. The commission members knew that the power of the banks within the economy, through their control over the credit and capital markets, allowed them to manipulate the system, thereby turning a banking crisis into a macroeconomic one. The commission therefore recommended that the banks' power and activity in the capital market be sharply cut back. The panel determined that "the banks should no longer operate as advisors and brokers of shares, as managers of mutual funds active in share trading and provident funds... that banks should not offer services directly or otherwise as brokers or advisors in any context regarding shares."

These recommendations were never adopted. The banks prevented any legislation that might have cut their strength and profits from the capital markets by pressuring finance ministers, central bank governors and politicians. Only the stubbornness of staff at the treasury and the Bank of Israel led to certain changes, though not as prescribed in the Beisky report.

In other words, Zeiler already knows his commission will meet for the next year and a half with lawyers collating and sifting through loads of material. Afterwards, the panel will hear evidence and submit a thick report with conclusions and recommendations for changes in the waybuildings and public places are inspected and approved.

But once the recommendations are published, all parties that stand to lose out from the findings will get together, ensuring that any proposed change will be buried under a mountain of bureaucracy and shoved to the back of the drawer to collect dust. That is why Zeiler is already frustrated.