"Clearly there's a problem with senior executive pay," Governor of the Bank of Israel Stanley Fischer said today at the press conference at which he presented the Bank of Israel's report for 2009. He said Supervisor of Bank Rony Hizkiyahu had already written to the banks to begin discussion of the matter with them. "We need to deal with this, and it can't be ignored," Fischer stressed. "This is a very difficult problem, and we need to formulate a stance based on what is happening in the economy. It's clear what direction we are going in, and the framework in which we will deal with this."
Fischer also commented on research that appears in the report on business groups that dominate the economy, and that concludes that they put the whole economic system at risk because of the danger that one of them will collapse. "If you're in a small economy, there's always a problem like this, and clearly it can cause damage. We will never manage to reach the same level of competition as there is in the US. That won't happen," Fischer said.
On the question whether next year will be better for the ordinary citizen, Fischer said, "It's impossible to make promises. Life is full of surprises, but the expectation, and it's fairly safe, is that growth will be higher than the increase in the population, and so the ordinary citizen will see his economic situation improve. We don't see vulnerabilities at present, but again, had you told me that a volcano in Iceland would paralyze the world, I wouldn't have believed you."
Published by Globes [online], Israel business news - www.globes-online.com - on April 21, 2010
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