Gov't to discuss concentration in economy

A special meeting in September will probably form a committee on the issue.

Sources inform ''Globes'' that Prime Minister Benjamin Netanyahu will convene a special meeting on September 15 to discuss concentration in the economy. The meeting will decide whether to establish a government committee to examine the matter.

Participants at meeting will include Minister of Finance Yuval Steinitz. Governor of the Bank of Israel Prof. Stanley Fischer, Prime Minister's Office director general Eyal Gabbai, National Economic Council chairman Eugene Kandel, and Israel's top four regulators: Supervisor of Capital Markets, Insurance and Savings Prof. Oded Sarig, Antitrust Authority director general Ronit Kan, Supervisor of Banks Rony Hizkiyahu, and Israel Securities Authority chairman Zohar Goshen.

The sources believe that most of the participants in the meeting will oppose proposals raised in recent months, including a ban on owning the controlling interest in non-financial companies by financial institutions. However, the sources also believe that the meeting will nevertheless approve the setting up of a public committee on concentration in the economy, because of public pressure and Netanyahu's repeated promises to deal with the matter.

A government committee could have some advantages: it will be able to counter far-reaching initiatives by the Knesset Finance Committee and Economic Affairs Committee, and it will be perceived by the public as a serious body. Furthermore, it would give Netanyahu a breathing space to avoid dealing with the issue for at least a year.

Sources believe that the committee, if established, will reject most of the radical structural changes proposed to date, and that it will focus on specific issues, such as boosting competition in certain markets, and strengthening corporate governance.

Published by Globes [online], Israel business news - www.globes-online.com - on August 18, 2010

© Copyright of Globes Publisher Itonut (1983) Ltd. 2010

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