The richest women in Israel, Shari Arison came out swinging today, blasting the Bank of Israel and accusing them of trying to nationalize her bank. Fresh off news that she is in divorce proceedings from her felon-husband Ofer Glazer, Arison is taking out her frustration at the BOI and she may be justified.

After all, the government doesn’t own the bank so why should they have a say in who she hires and fires as CEO of Bank Hapoalim?

According to Globes: “Arison said, “This isn’t control. This is a raid. It is creeping nationalization, and rapid creep. I won’t lie to myself, and I won’t do something that I don’t believe in just to placate a demand that I consider utterly unjustifiable. I feel very hurt. An arrow was fired and the target was drawn around it. There’s a feeling of McCarthyism - no law, no justice. This is simply a frame-up just because someone doesn’t like somebody else.”

Maybe the Bank of Israel should stick to payinmg attention to the economy, and worry less about non-government companies. Go get ‘em Shari!

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The Bank of Israel just announced that interest rates will remain unchanged this month at 0.5%.

This move had been expected as we have started to see inflation pick up, and the BOI was gun shy about cutting rates even more in the face of inflation.

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No economic growth, a stable currency, and yet the March CPI figure jumped by 0.5%.

According to Ynet: ” The Consumer Price Index (CPI) rose by 0.5% in March compared to February, the Central Bureau of Statistics (CBS) said Tuesday, following four months of price reductions in light of the recession. Analysts were surprised by this figure in light of pre-estimations pointing to a stable CPI or a price-hike of up to 0.2%. Since the beginning of the year, the CPI has fallen by 0.1% on the backdrop of rise in unemployment, the cutting down of production and the drop in demands.”

The jump was led by higher fuit and vegatable prices as well as higher housing costs. This will surely mean that BOI head Stanley Fischer will hold interest rates steady for the time being.

If we see continued higher CPI readings we may start seeing higher interest rates. That could delay any Israeli economic recovery.

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In what shouldn’t come as a shcok, becuase it’s happened everywhere else in the world, news is out today that all of the rate cuts given by the Bank of Israel, have not worked their way down to the borrower.

According to Globes: “The Bank of Israel today published the minutes of the monetary council meeting for the interest rate for April. The minutes reveal that the decision to cut the interest rate for April was unanimous, despite acknowledgement that makes the banks’ ability to pass the reduction on to the economy is limited. The Bank of Israel states, “The transmission between a reduction in the Bank of Israel interest rate and a reduction in the interest charged to borrowers by banks is weakened at such low rates of interest. This is the case because banks maintain the banking spread (the difference between the interest they charge on interest and the interest they pay on deposits), and in the current situation their ability to reduce the interest they pay depositors is limited, as the rate is close to zero.”

Well duh. Why is this such a surprise?

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