Justice minister presents central bank governor compromise Bank of Israel bill

Justice Minister Meir Sheetrit presented to Bank of Israel Governor David Klein and to Finance Minister Silvan Shalom a compromise draft of the Bank of Israel Law amendment yesterday, which was approved by the cabinet and the ministerial legislation committee, TheMarker has learned.

On March 17, the Finance Ministry presented the cabinet the essentials of this amendment. Among other things, the amendment forms a monetary council, and sets additional objectives for the bank, namely employment and growth.

The ministerial legislation committee approved the amendment this Tuesday after the addition of an article that allows the bank and the ministry to reach a compromise by next Sunday. Should the parties reach a compromise by Sunday, the cabinet will amend the draft that was approved on Tuesday.

Sheetrit, who heads the committee, supports the recommendations of the Levin commission that was appointed to propose amendments to the Bank of Israel Law. Among its recommendations was the formation of a monetary council to advise to the governor on interest policy. The position of the Levin commission is closer to that of the bank. Sheetrit abstained in the voting on Tuesday, and has since been trying to bridge differences between the bank and the treasury.

Sheetrit himself presented an amended draft, but a legal sector source said that the bank will probably oppose the draft because it doesn't allow the bank full independence and does not set price stability and a central target. "It's still far from a version that the bank is ready to accept," the source said. He explained that it would have been simpler had the treasury had a cohesive view on this. "Opinions on the version differ also there," the source said.

It is estimated that Finance Ministry Director General Ohad Marani will agree to talk with the bank and reach a compromise, but Shalom insists on the draft being approved in the format approved by the cabinet.