Ministry of Finance director general Yarom Ariav today met in New York senior US financial executives to hear their recommendations on how to turn Israel into an international financial center. The executives, mostly from Citigroup and Lehman Brothers, are members of the advisory committee that the Ministry of Finance established to assist the Ariav committee on capital market reform. The ministry's representative in New York, Zvi Halamish, heads the committee. A second committee was set up in London.
In an interview with "Globes", Ariav said that in addition to the subject on how to turn Israel into an financial center, the advisory committee would also discuss how to facilitate access by small and mid-sized businesses to the capital market and dilute the concentration in Israel's capital market. He said that he expects to hear from the committee members which barriers Israel should lift, and which financial growth engines the country ought to develop into to become a financial center that is attractive to investors.
Yesterday, in Boston, Ariav met Massachusetts State Treasurer Timothy P. Cahill and investors, analysts, and Jewish community leaders in three separate meetings. Ariav said that questions were raised about the impact of geopolitical developments, including the Iranian threat and the flare-ups in Gaza, on the Israeli economy. He replied that the Israeli economy demonstrated its strength in the past, including during the Second Lebanon War in 2006.
Asked about the privatization of Bank Leumi, Ariav said, "We are continuing with the process, but we aren't working with a stopwatch in hand or with a gun to the head."
In response to a question about the effect on the Israeli economy of the sub-prime crisis and resulting credit squeeze, Ariav said that Israel's exposure to these problems was smaller than the exposure of other economies because of Israel's diversified exports, its many export destinations, and because the economy had been strengthened by new growth engines in recent years.
Ariav said, "All forecasts predict that the effect of the sub-prime crisis and the problems that derive from it on the Israeli economy will be slightly less robust growth compared with the past two years. Israel signals stability to the world against the backdrop of global market shocks."
Published by Globes [online], Israel business news - www.globes-online.com - on March 6, 2008
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