Israel watchdog requests bank data for interest rate probe. On Sunday, Israel’s competition watchdog requested more data from the country’s banks, alleging they were profiting from rising loan interest rates without appropriately benefiting clients.
The 2022 inquiry was revealed on Sunday. The Bank of Israel hiked its benchmark interest rate to a 2006 high of 4.75% last Thursday, its 10th straight increase from 0.1% last April.
“The fight against the cost of living tops our government’s list of national priorities,” Prime Minister Benjamin Netanyahu told a cabinet meeting on Sunday, adding that he will form and lead a ministerial panel.
Inflation and the central bank’s rate have raised mortgage and loan payments. Despite record bank profits and shareholder payouts, this has angered the public.
First-quarter profits for the top five banks were 6.3 billion shekels ($1.7 billion).
The Competition Authority said banks had delayed passing higher rates to client deposits.
As mortgage, loan, and living costs rise with inflation around 5%, Israel’s aggressive policy-tightening cycle has angered its residents.
The Competition watchdog, formerly the anti-trust watchdog, said it initiated the probe in 2022 when interest rates were rising and asked banks for further data this week based on preliminary results. Disciplinary punishment was not disclosed.
Israel’s financial authority minimized it. Last week, bank supervisor Yair Avidan informed reporters that 82% of rate hikes had been passed on. However, he advised banks to educate people about interest-bearing accounts, as many were unaware.
Last week, Economy Minister Nir Barkat urged Competition Authority director Michal Cohen to resign, stating she was a significant reason for increasing economic costs because the authority had not tackled monopolies enough. Cohen refuses resignation.
Barkat said the authorities “must carry out this investigation intensively, quickly and efficiently, because until it is completed, the public will lose.”
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