Banking Regulation in Israel: Balancing Systemic Stability and Consumer Protection

תקציר

The Israeli Supervisor of Banks is in charge of two regulatory goals: Maintaining the stability of the banking system ("prudential regulation") and consumer protection. On the face of it, these two goals are consistent and complete each other. However, in certain situations they may conflict, making it difficult for the Supervisor to simultaneously promote them both. A striking example of such a situation is the issue of banking fees, which serves as the case study of the chapter.<br><br>The chapter examines whether both fields should remain within the ambit of the Supervisor of Banks, or be divided between two separate regulators. Various countries have adopted different models in this regard, where each model has its own advantages and disadvantages.<br><br>After analyzing a set of considerations and examining their implementation in the Israeli banking context, the chapter concludes that both powers should be left with the Supervisor of Banks, subject to a few operative recommendations aimed at strengthening protection for the banking consumers.