Governor of the Bank of Israel Prof. Stanley Fischer and Supervisor of Banks Rony Hizkiyahu today met bank executives in Jerusalem to discuss the current situation in financial markets.
Bank Hapoalim CEO Zvi Ziv and Bank Leumi CEO Galia Maor said upon entering the building that there was no reason for concern.
When "Globes" asked Mizrahi Tefahot Bank CEO Eli Yones if there was anything to be worried about, he replied, "I don’t know. Go ask your wife."
First International Bank CEO Smadar Barber-Zadok declined to comment on the situation, merely saying that the bank's customers had no reason to worry.
Union Bank CEO Haim Freilichman was more forthcoming. He said, "The crisis is centered on the US, and the most important thing to do is to avoid reckless impetuousness. In times like these, it is important to diversify risks as we always do and as the entire banking system does. Never forget that just as stocks go down, they also rise. We're already seeing stock markets rise today."
During the meeting, Fischer summarized the recent developments in the financial markets in the US and elsewhere and their impact on the Israeli economy, in particular on its financial system. Hizkiyahu reported on his meetings last week with US regulators and the lessons for Israeli banks.
The banks CEOs reviewed their exposure to the recent developments, particular to Lehman Brothers Holding Inc. (NYSE: LEH). They also outlined the measure they are taking in this regard.
Today's presentations, previous discussions between Fischer, Hizkiyahu and the banks, and an analysis of the banks' reports to the Banking Supervision Department, indicate that the Israeli banking system's exposure to Lehman Brothers is limited. The banks also appear to be taking the necessary measures for effective management of their assets in view of the situation in the US.
Fischer and Hizkiyahu both expressed their confidence in Israel's banks and in their risk management mechanisms. Fischer said that the Bank of Israel would closely monitor developments in the global financial system and their effects on the Israeli banking system, local financial markets, and on the economy in general, and that he would not hesitate in taking whatever steps he deemed necessary.
Published by Globes [online], Israel business news - www.globes-online.com - on September 17, 2008
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