The Economics Committee discusses the non-reduction of mortgages to the public – real estate

Today, the committee convened and during the discussion, the committee’s chairman, MK Yaakov Margi, criticized the banks, saying that “dealing with the banks is like the neuroscience and it is not possible for the banks not to give a shoulder in dealing with the corona crisis.”

Deputy Supervisor of Banks Ricky Elias went on to argue that eventually customers ate will receive the discount (even if nine years late, due to the mistake of the central bank itself) and added that “the bank started getting information at the individual loan level, and should give time for the process to mature “We are determined that the process is progressing and interest rates will fall more significantly and we have the tools to make sure of that.”

The commissioner of the Competition Authority, Adv. Michal Halperin, also tried to broadcast pressure on the banks and said that “all possible steps are on the table in this matter.” What does this actually mean? It remains only to wait and see if the regulatory threats have teeth.

MK Shlomo Karai, who addressed the matter, said that the banks saw that it was good, and that there was a limit that allowed them to charge high interest rates and therefore did not want to stop it. He added that a customer who chooses the prime route takes the risk and the banks have completely ignored it. “The interest rate should reflect the risk to the bank and not the monopolistic power that the banks have,” he said.

The commissioner of the Competition Authority, Adv. Michal Halperin, said that a system should be created that makes the banks’ offers accessible in a way that can make a real comparison between them, one that will increase competition. This is an essential step for competition between the banks, “she said.

The CEO of the Association of Banks, Eitan Madmon, tried to claim that although the banking system provides 95% of the mortgages, there is still competition and that the risk to the banks has also increased and cannot be ignored, “but the chairman Margie rightly remarked that” It would not have taken place. ”

MK Shlomo Qara rejected the claim, saying: “The banks know how to hedge this risk. Her mortgage is the safest loan there is. You blocked the competition and you are expected to stop it. “Margie threatened that if the banks used their power at the end there would be legislation that would restrict them and allow the entry of new players. When you increase the prime component, you increase the loss component. ”

Adv. Halperin added that even if not all the banks had the same event, it does not mean that there is no place for the Competition Authority to intervene. We intend to do that. ”

At the end of the meeting, the committee members requested to receive a summary report from the Bank of Israel within a month that would allow for a reduction in mortgages, as well as position papers from the Bank of Israel and the Competition Authority regarding the steps they intend to take.

Recall that in fact the Bank of Israel thought it knew what was good for you and it stated nine years ago that you could not take out a variable rate mortgage at a rate of more than a third. The Bank of Israel feared that the interest rate would rise and that the variable interest rate would rise and the public would be harmed. Therefore, it limited the variable interest rate component of the mortgage volume and actually raised the weight of the fixed interest rate – a more expensive interest rate, but sure in the sense that if the interest rate in the economy rises, it will not rise.

Because of that directive of the Bank of Israel, every family lost hundreds of shekels a month – and for years. Every family that has a mortgage has lost tens of thousands of shekels because of the Bank of Israel, because the bank “takes care of us”.

Bottom line: the Bank of Israel did not read the map correctly, the interest rate only went down. The loss to the public has only grown. That’s not the whole story – the banks have benefited from the move because they are on the way to raising interest rates. According to them, they should have confined more capital to the fixed interest component, and the interest rate became more expensive.