To Presentation (Hebrew)
Supervisor of Banks Dr. Hedva Ber spoke today at the “Calcalist” National Economic Conference, and presented a summary of the major changes that have taken place in banking in recent years, and of the changes expected in the coming period.
·     In recent years, following the Global Financial Crisis and the collapse of many banks in the US and Europe, banking regulation around the world, including in Israel, became very rigid.  Capital requirements, liquidity requirements, and risk management were increased in order to strengthen the stability of the banks.  In parallel, consumer regulation and the effort to increase competition were also greatly reinforced.
·     The banks’ success in meeting the more stringent regulatory requirements of the past few years, chiefly the capital adequacy requirement, will enable them from now to increase credit to large corporations and to distribute dividends to their shareholders among the public, directly or through pension savings.
Since the Global Financial Crisis, regulatory requirements imposed on the banks around the world have become more rigid.  In Israel as well, the Banking Supervision Department required the banks to meet challenging regulatory requirements to strengthen their stability, in capital, liquidity, risk management and compliance.  The need to meet capital adequacy requirements contributed to the growth of nonbank entities’ share of credit to large corporations, an increase in credit to households and small businesses, and greater stability of the banks.
Banking in Israel has changed greatly in recent years.  Credit to large borrowers has declined significantly, the banks have focused on households and small businesses, and competition has increased in all activity segments.  The many actions currently being advanced by the Bank of Israel, the Ministry of Finance and the Knesset, and the significant technological changes affecting customers and banks, will lead to continued change in banking in the coming years as well.
In view of the significant increase in capital in recent years, and reaching the regulatory targets set by the Banking Supervision Department, the banking system today is more stable, and more capable of withstanding the next crisis.
During the conference, the Supervisor of Banks noted that, “The fact that the banks have met the regulatory requirements will enable them, beginning in 2017, to expand credit to large and manufacturing corporations  as well, following a significant decline in this credit in recent years, and to increase the distribution of dividends to shareholders, who are mainly the broad public, who hold shares directly or through pension and provident savings plans.”
The Banking Supervision Department has defined the principles that will determine the amount of dividends that the banks will be able to distribute:
1.      Meeting the regulatory capital targets;
2.      Setting out an outline to reach the capital target each bank has set for itself;
3.      Withstanding a uniform stress test set by the Banking Supervision Department each year;
4.      Adjusting to the economic environment and the special circumstances of each bank.