The Right Coast
July 21, 2005
Israeli Banking Reform
By Mike Rappaport
Interesting article on banking reform in Israel in the Weekly Standard:
ISRAEL'S UPCOMING WITHDRAWAL FROM GAZA is drawing so much attention that few have noticed the dramatic vote this week in Israel's Knesset Finance Committee ratifying a government resolution to finally reform Israel's regressive financial markets. This reform will break up a bank duopoly which has inflicted more harm on the Israeli economy than Japanese banks have inflicted on Japan. Despite continued resistance from the banks, once this reform is enacted and bureaucratically implemented, Israel's economy will take off, realizing its potential to become one of the 10 richest countries in the world.The article also suggests that this might not be the last of the reforms:
But even more encouraging, for the first time in Israel's history, university students' organizations, representing 80,000 students, publicly struggled for the reform in coalition with free-market advocates. Israeli universities, like their American counterparts, are usually left-leaning. That their students, who have been for so long under the influence of professors who are strident advocates of an extreme welfare state would join the fight for free markets in Israel represents a sea change. This change in mindset, and the structural changes that the economic reform will generate, could transform Israel profoundly.