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Economic Conference Told Increased Interest Rates Would Attract Foreign Deposits

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An Israeli banker proposed at an international gathering of business executives that Israeli banks raise their rate of interest on dollar deposits in order to attract more deposits from foreign nationals living here as well as new capital from non-residents. Daniel Recanati, chairman of the Israel Discount Bank, told the economic committee at the World Economic Conference for Israel that a slight increase in interest could increase dollar deposits from their pre-sent level of $180 million to $1 billion in the next five or six years.

Mr. Recanati, whose bank is Israel’s second largest and maintains branches in the United States and other countries, noted that Israeli banks now pay six to seven percent interest. He said that European rates would continue to be highly competitive but doubted that would deter foreign residents from bringing more of their funds to Israel.

The week-long Economic Conference closed today with an address by Premier Golda Meir who declared that Israel wanted to contribute to the economic improvement of the entire Mideast. But, she said, such aid can be provided only on the basis of cooperation, mutual recognition and negotiations between all nations of the region. Earlier, Joseph Meyerhoff of Baltimore, Md. announced the establishment of a new bank and holding company, with an Initial capital subscription of $50 million, as a joint venture of the Israel Discount Bank and the Israel Economic Corp. The latter is an American company established by Zionists in the 1920s to promote investments in Jewish enterprises in Palestine. Michael Tsur, director of the Israel Corp., a special investment and holding company established by the first World Economic Conference for Israel convened by the late Premier Levi Eshkol in April, 1968, said subscription pledges have already exceeded $20 million and will be paid up by June, 1970. He said the corporation’s goal was an initial subscription of $35 million and that plans called for raising $17 million in the U.S., $8 million in Europe, $6 million in Israel and $4 million in other countries.

At an earlier session, Asher Yedlin, a Histadrut official, said that with only a 50 percent increase in investments in Israeli enterprises, production could be doubled. He is secretary general of Hevrat Ovdim, the agency overseeing Histadrut-owned industries. The party was addressed by Deputy Premier Yigal Allon, Minister of Immigrant Absorption, who said that all immigrants could be absorbed with Israel’s present economic and social climate. He expressed hope that many foreign professionals would settle here and predicted that immigration in 1970 would amount to 50,000 compared to the 35,000 forecast for 1969. Sir Isaac Wolfson, of Great Britain, said that 20 conference participants had announced they would settle in Israel shortly.

The parley heard progress reports and comments from chairmen of overseas regional committees established in 1968. Lord Sieff of Brimpton, British committee chairman, said the sharp decline in Israel’s foreign currency reserves was a cause for concern, proposed measures to remove the burden of financing vital industries from the Israeli Treasury, and suggested creation of a financial reserve from which Israel could draw in times of need. Francois Pereire, of France, European committee head, said his group had started operations in eight countries. M. Lubner, of South Africa, reported a 47 percent increase in trade with Israel since April, 1968. Israel Klavin, of Brazil, Latin American chairman, said investment offices were being opened in several South American countries and cited a $2 million Israel trade exhibit that opened in Buenos Aires last week. Ray Wolfe, of Canada, said trade with Israel was progressing at a rate of $20 million a year. Saul Eisenberg, of Japan, said he could not report much progress because few Jews lived in the Far East.

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