Supervisor of Banks Urges Wage Cap Revisions Amid Strong Sector Profits
Supervisor of Banks Daniel Hahiashvili called for a revision of outdated banking wage caps to prevent talent drain, while affirming the banking sector's resilience against potential housing market corrections.
The Supervisor of Banks, Daniel Hahiashvili, stated in an interview with Walla that the current wage caps in the banking sector are outdated and hinder the ability to attract top-tier talent. According to Hahiashvili, wages in the private sector have risen significantly over the years, whereas banking salaries remain constrained by legislative limits.
Banking Profitability and Taxation
Addressing the high profitability of the banking system, Hahiashvili attributed it to economic growth, credit expansion, and operational efficiency, alongside substantial low-cost current account deposits. Despite these high profits, the Supervisor opposed sector-specific excess profit taxes, emphasizing that such measures complicate the introduction of new financial entities.
Housing Market and Developer Financing
Turning to the housing market, Hahiashvili noted that unsold apartment inventories stand at 85,000 units, leading to increased developer financing and reliance on 20/80 financing promotions. Although real estate risks have risen, he assured that the banking sector possesses sufficient resilience to absorb potential price drops of up to 30%.
"We support allowing banks to sell insurance and capital market products; it is logical, and we must continue to convince policymakers," noted Supervisor of Banks Daniel Hahiashvili regarding financial reforms.
Palestinian Correspondent Banking
Regarding the longstanding request by Israeli banks to sever ties with Palestinian correspondent banks, Hahiashvili explained that no viable alternative has been established yet by the state, keeping the current arrangements temporarily in place.
