Bank Leumi (TASE: LUMI) president and CEO Galia Maor is implicitly criticizing the Ministry of Finance's tardiness in proposing a safety net for pension savings. At a Bank Leumi conference on pension advice today in Tel Aviv, she said, "The importance and necessity of a high level of long-term savings is clear to all of us, both at the macroeconomic level and at the level of individuals. But long-term savers have suffered heavy losses in recent months because of the drop in the capital markets. A glance at provident fund figures shows an increase in net withdrawals of deposits."
Commenting on the economic situation, Maor predicted that 2009 will be a tough year. "This is an immense financial crisis, which has turned into a global crisis in the real economy, the scale of which we haven’t experienced in decades. 2009 will be a year of a real recession, a sharp increase in unemployment. Households will face financial trouble and bankruptcies of companies will increase. We predict 2% GDP growth in Israel, which means that GDP per capita will be unchanged, but the very slow growth that we predict is not enough to prevent a rise in unemployment. I believe that with the right economic policies, the rise in unemployment won't be too great, as they were at start of this decade."
As for the Bachar capital market reforms, Maor said, "You're all waiting for me to comment on the Bachar committee recommendations and how they hurt the banks and to say something about current event along the lines of, 'What if…", and whether the mutual and provident funds ought to be returned to the banks. I have no intention of doing so. We cannot restore what was."
Maor nevertheless lambasted the lack of regulations over non-bank financial institutions. "There must be tight supervision, with an emphasis on risk management, over institutions that manage other people's money," she said.
Published by Globes [online], Israel business news - www.globes-online.com - on November 23, 2008
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