Moshe Mandelbaum, Governor of the Bank of Israel, resigned Monday in the wake of a scathing indictment of Israel’s banking system by a commission set up to investigate the collapse of bank shares in 1983.
The commission, headed by Supreme Court Justice Chaim Beisky, released its report Sunday night. It recommended, among other things, that the Governor of the Bank of Israel and the heads of the five largest commercial banks be made to resign within 30 days. Mandelbaum had planned to leave office shortly as head of Israel’s central bank, which plays a regulatory role similar in some ways to the Federal Reserve Bank in the U.S.
His early departure set off a search for a replacement and several names were mentioned Tuesday as likely candidates. Finance Minister Moshe Nissim, who took over the Treasury only a week ago, said he has his own choice but would not name him before consulting with Premier Shimon Peres and Foreign Minister Yitzhak Shamir, leader of Likud, which is Nissim’s party.
Among the possible replacements for Mandelbaum are Deputy Finance Minister Adi Amorai; Michael Bruno, a professor of economics; Emanuel Sharon, Director General of the Finance Ministry; and Moshe Zanbar, who was Mandelbaum’s predecessor at the Bank of Israel.
The Bank Hapoalim is also looking for a replacement for its board chairman, Giora Gazit, who resigned Monday. Its directorate and the directors of the Bank Leumi met Tuesday to consider the Beisky commission report and possible replacements for other senior banking officials who may resign in the coming weeks. The Bank Hapoalim also released its annual report Tuesday, which showed profits up by 85 percent in 1985 compared to 1984.
STOCK EXCHANGE SEEMS UNAFFECTED
The Tel Aviv Stock Exchange, whose management was blasted by the Beisky commission for failure to heed warnings of the market collapse three years ago, appeared to be unaffected by the report. Since it was released the prices of most shares rose by an average of about one percent and advances far outnumbered declines.
Meanwhile, the Knesset is embroiled in a heated debate over whether to pass legislation that would protect the banks from law suits by customers who, in light of the Beisky commission’s findings, could claim they were defrauded. The government is inclined to enact such laws to preserve the stability of the banking system.
The Archive of the Jewish Telegraphic Agency includes articles published from 1923 to 2008. Archive stories reflect the journalistic standards and practices of the time they were published.
