Minister of Finance Betzalel Smotrich and Bank of Israel Governor Prof. Amir Yaron today announced the establishment of a professional interministerial team to increase competition in the banking system and in credit to small businesses and households.  The team will be led by the Supervisor of Banks and the Head of the Budget Department at the Ministry of Finance.  The team will focus on easing the barriers that are preventing the entry of new participants to the banking system or the development of new areas of activity by existing participants.

 

Clear objectives have been set for the team.  These include designing the path for graduated bank licenses that will enable nonbank entities to offer deposits and provide credit.  This measure is expected to change the rules of the game, expand competition, and lower the costs of financing for the retail segment.  The team’s timetable is short.  The final report is expected to be presented by April 2025, out of a commitment to provide tangible results to the public and the economy.

 

Minister of Finance Betzalel Smotrich:

“This is an auspicious moment in the struggle to lower the cost of living.  Opening the deposits market will certainly bring competition over credit, and will be a historic step in improving the well-being of Israel’s citizens.  We are determined to create a diverse, competitive, and accessible credit market that will save the Israeli public thousands of shekels and will strengthen the entire economy.  The struggle against the cost of living is taking another step today.  We will defeat the cost of living.  Together.”

 

Bank of Israel Governor Prof. Amir Yaron:

“The best way to advance competition is to remove barriers that are preventing the entry of new participants to the financial field and the development of new areas of activity.  In order to significantly advance competition, we require the entry of new banks.  These will be able to raise deposits as a relatively inexpensive source of financing, against which they will provide credit and compete with veteran participants.  I welcome the establishment of the teal, which will focus on examining and eliminating barriers to the entry of new banks.”