Wednesday, May 09, 2007

Bank Fees "On Trial" Today


Remember that bank fee post I wrote about a few months ago. Well...

Ha'aretz reports:

Knesset to present harsh findings on banking fees
09.5.07 | 02:50 By Ram Dagan

The Knesset Economic Affairs Committee will convene this morning to discuss bank fees charged to private customers again. As the meeting opens, the special investigative team established by the committee will present its findingsto the committee and its chairman Moshe Kahlon. The team's work was directed by Prof. Shmuel Hausner, former chief economist at the Israel Securities Authority.

The presentation will include international comparisons to show that in proportion to disposable income in Israel, the bank fees here are among the highest in the world.

This backs data the Bank of Israel presented to the committee about two months ago, as revealed by TheMarker. According to the Bank of Israel study, the average Israeli pays about NIS 430 shekels (78 euros) in annual bank fees, as do people in most developed countries. But this sum is a far more substantial cost in Israel, where earning power is lower than in the countries listed in the Bank of Israel study.

In addition, the banks will also have the opportunity to present their own findings. In past discussions, the banks have been allowed only to respond to the Bank of Israel's study.

The banks will be represented by the managing director of Association of Banks in Israel, Moshe Perl, who will present studies and reports by the association, Israeli banks and other international bodies. The association will continue trying to persuade the committee that there is no reason for legislative intervention on bank fees for private customers. The association is expected to get some surprising support from Hausner, who is not an enthusiastic proponent of government intervention designed to regulate competition.

The three largest banks decided in late 2006 to raise the fees they charge private customers. The decision turned out to be an unfortunate one, generating a wave of sharp public criticism and causing the Bank of Israel to lead legislative measures to enable the supervisor of banks to intervene in the size and type of fees the banks may charge.

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