June 22--The Ministry of Finance is examining steps to declare financial institutions that manage other people's money as quasi-public bodies. Sources believe that if the cabinet approves the proposal and if legislative amendments are needed, they will find sweeping support in the Knesset, in the face of massive pressure by these institutions -- banks, insurance companies, and investment houses, including through unions and professional associations.
The Ministry of Finance's review has been underway to a thunderous silence for months, in view of the mix of opposition and indifference of the institutions' executives and directors over executive compensation and the ministry's explicit and repeated demands to scale back the exorbitant pay. Declaring banks, insurance companies, and investment houses as quasi-public bodies will make it possible to tighten regulations on them, including salaries.
For now, salaries are the primary objective of Minister of Finance Yair Lapid, Ministry of Finance director general Yael Andorn, Supervisor of the Capital Markets, Insurance, and Savings Dorit Salinger, and Accountant General Michal Abadi-Boiangiu.
The basic assumption is that the old-boys and girls network of executives and directors is the reason for the profligate salaries, especially at the banks, where salary expenses are high and above their foreign peers. These salary costs are a direct cause of the high fees and commissions charged the public, as well as the very high spreads (the difference between the interest paid to the public on deposits and the interest charged on credit), which has a direct effect on the cost of living.
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