Israel Antitrust Chief Slams Major Banks Over 20 Billion Shekel Deposit Gap
Israel's Antitrust Commissioner Michal Cohen slammed major banks at the Investment Houses Association conference, citing a 20 billion shekel gap in household deposit yields. The move has sparked a regulatory clash with the Bank of Israel.
Israel's banking sector has once again come under intense regulatory fire, this time from Antitrust Commissioner Michal Halperin (acting as Head of the Competition Authority, Michal Cohen). Speaking at the annual conference of the Investment Houses Association, Cohen launched a sharp attack against the major banks, accusing them of maintaining market dominance at the expense of ordinary consumers.
The Battle Over Dormant Customers
"The banks are guarding their fortress. They want dormant and unengaged customers," Cohen stated, criticizing institutions for deliberately obscuring fee structures and making it difficult for the public to compare financial offers.
At the core of the regulatory dispute lies a staggering figure: 20 billion shekels. According to calculations by the Competition Authority, if household deposit interest rates had tracked those offered to large corporations following broader monetary hikes, bank profits from households would have been lower by approximately 20 billion shekels between 2022 and 2024. While this represents a counterfactual scenario rather than a direct clawback demand, it underscores the wide disparity between conditions afforded to corporate clients versus the general public.
"We want regular savers to receive the true market price, not just those who know how to call and haggle," Cohen explained at the conference.
Regulatory Clash and Future Outlook
To combat these disparities, Cohen designated the five largest banking groups as a concentration group last May, imposing new regulations focused on deposits. Under the rules, banks will be required to increase transparency, proactively contact clients prior to deposit maturity dates, and present alternative investment avenues, including money market funds.
The friction, however, extends beyond the commercial lenders. The Bank of Israel has openly opposed Cohen's decision, labeling the concentration group designation as an "extreme and disproportionate step." The central bank argued that many of the proposed measures overlap with existing reforms and that the move could undermine regulatory certainty and deter investors, noting that certain directives require its explicit consent.
While the Competition Authority's directives are slated to take effect on May 6, 2027, the banks are currently pursuing legal challenges. Cohen expressed confidence at the conference that the authority will successfully defend its measures before the Antitrust Tribunal.
