the banks would have both a direct adverse impact on customers and an indirect effect that would result from its negative impact on economic growth. 4. the importance of the reform in bank fees i am in favor of this important reform, because it is likely to increase competition in the banking industry, to the benefit of its customers. the reform was the outcome of the intense efforts by the knesset, mainly by member of knesset ( mk ) moshe kahlon, mk gilad ardan, the entire economic affairs committee, and the supervisor of banks. here i would like to compliment the staff of the banking supervision department on the efforts they invested in this area, which resulted in a necessary and wellplanned reform. i would also like to mention the ministry of finance, the director - general of the anti - trust authority, expert advisers and consumer organizations, all of whom cooperated on this issue and supported the reform. the aim of this reform, which will affect us all, is to lower the costs paid by banks ’ customers. there are two ways of achieving this : one is by imposing wide - ranging supervision on bank fees, and the other is by increasing competition in the banking system, and lowering prices via market forces. the first method gives immediate results, but brings in its wake much damage, which i will describe later. the second approach is the right one, which will yield long - term gains to consumers and to the economy as a whole. the reform has increased the level of transparency with regard to fees, and transparency is essential to the development of competition. thus, the reform reduced the oversized list of bank fees, gave them uniform names, and created the current situation in which, for the first time, customers know the prices they are asked to pay for banking services. as a result of these changes, consumers can compare prices and make informed decisions – just as we all do when we go shopping. this has revolutionized the pricing of banking services, and customers can see what they would be charged for various services in each of the banks, and they can then make rational decisions. to help customers, the bank shows on its website the fee tariffs of the banks, tables and calculators enabling customers to compare the costs of managing their current accounts, and other detailed relevant information. all these have created a new situation in israel : for the first time customers are well aware of the full implications of the bank fees and have become more actively involved in this issue. the reform also abolished fees

be inadvisable to opt at this stage for simpler, “ instant ” solutions, such as imposing wide - ranging supervision over bank fees, or forbidding banks to charge fees at all. we must give the new system time to operate properly, and to allow the banking supervision department to deal with flaws that may come to light. supervision must be the last step, not the first, and even then only if there is absolutely no alternative. sweeping supervision is not advisable, is unacceptable around the world, will take us back to somewhere we do not want to be, and is likely to have an adverse effect on competition which we all favor so highly, and thus, in the final analysis, on consumers. this would probably occur because supervision is likely to result in the banks setting uniform fees, at the exact level determined, and the quality of service to customers would be impaired. moreover, and certainly no less important, it would probably deter potential competitors, particularly foreign banks, from entering the field of banking in israel, meaning that competition would remain at its low level. clearly we must give the reform a chance ; it has been in effect just two weeks. it is also important that we all support the supervisor of banks in advancing the reform, and he, on his part, will do what is necessary to correct any flaws and to speed up the whole process.