The privacy of Israeli citizens will be protected even after the setting up of a credit database, Governor of the Bank of Israel Karnit Flug told the Knesset Economic Affairs Committee yesterday in a session on the Credit Data Bill. The committee approved the bill for second and third readings.
"The Bank of Israel sees great importance in the protection of privacy, and we are aware of the responsibility that lies on our shoulders in this respect in the setting up and operation of the database," Flug said, "We are sure that the privacy protection ombudsman whom I will appoint in accordance with the provisions of the bill will fulfill his or her task in the best possible way and will assist us in obtaining maximum protection of privacy.
"The credit database, which will contain financial information on all citizens of Israel, as well as their credit rating, will assist in boosting competition in the banking system in general and in the retail credit market in particular, in tandem with the banking identity card that was launched recently. The database provides a solution to the problem of asymmetric information. It will be an additional tool for boosting competition and expanding access to credit, at the same time reducing the discrimination that results from a lack of information. In addition, the database and the unidentified information in it will assist the Bank of Israel in monitoring developments in the credit market from the point of view of financial stability," Flug added.
The database is to be set up and operated by the Bank of Israel with the aid of a special steering committee appointed by Flug and Minister of Finance Moshe Kahlon on which, besides the Bank of Israel and the Ministry of Finance themselves, the National Economic Council and the Ministry of Justice are represented. The Governor of the Bank of Israel will appoint a Supervisor of Credit Data among whose responsibilities will be protection of customers' interests and ensuring that credit data bureaus operate lawfully.
Flug concluded her testimony by saying, "The value of the information in the credit database in boosting competition and improving the position of the consumer will increase to the extent that the public's financial awareness becomes deeper, because the consumer's ability to derive benefit from the solution to the information problem depends first and foremost on his or her own financial conduct. It is therefore important that the government should take action to help increase financial awareness among Israel's citizens."
Published by Globes [online], Israel business news - www.globes-online.com - on March 15, 2016
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