The brothers Moise and Joseph Safra badly want to buy

Israel Discount Bank of New York

, and that isn't news. Since their brother Edmond sold the Republic Bank of New York, which was the crown jewel of the Safra banking empire, to the Sino-British giant HSBC, the Safras have felt under-represented in the United States. And no major banking institution can afford that.

Discount New York fits the Safra hand like a glove. Most of the banking activity by Moise and Joseph is in South America, while Discount New York specializes in managing money for South American Jews. Moreover, wealthy South Americans have been exporting their money to safer banks in the U.S. and Europe, for fear that the Argentine collapse will prove catching in Brazil, Uruguay and Venezuela, for instance.

Much the same has been happening here, but to a far smaller degree. Here too the banks suddenly started marketing their overseas operations.

Bank Hapoalim

(TASE:POLI), bizarrely enough, even opened a representation of its Swiss operation in Tel Aviv's Azrieli Center.

Hence the Safras' screaming need for a banking center in New York. There are no better vehicles around than Discount New York, which has the same clientele as the Safra brethren: rich Jews.

To be accurate, the Safras have a bank in New York. If they do buy Discount New York, they will probably merge the two. The Safra National Bank of New York specializes in private banking services for people with "high net worth", which is bankese for "filthy rich". It also provides bond trading and foreign trading services. It has two branches in the Apple and more in Miami, as well as representations in Mexico, Argentina, Chie and Uruguay. Providing basically no credit, the Safra National Bank of New York is considered unusually stable, financially speaking.

But the Safras, who live in South America and know full well how the real world works, and how valuable personal contacts are, are apparently fretting that Discount New York might slip through their hands. Which is why Joseph Safra hastened over to Israel to meet with Finance Minister Silvan Shalom yesterday.

Discount New York's parent company,

Israel Discount Bank

(TASE:DSCT), is controlled by the State of Israel. Joseph Safra just wanted to make sure that the Safra group would be given equal treatment in the negotiations slated to begin seriously in a few days, compared with Bank Hapoalim and Bank Leumi.

Until two years ago, the Safras would probably have agreed to pay whatever price Discount cared to name for its New York outfit. But the brothers have encountered heavy losses on their cellular operations in Brazil, and on the First International Bank of Israel. Add to that the bust pervading South America: This time, the Safras will be counting their money very carefully.

How much is Discount New York worth? The question has the uppermost crust of Israel's business establishment losing sleep. How much should they bid? How high should they go? The prices flying around go as high as $800 million or even $900 million, but that would present a truly high premium for control.

International private banking, which is what Discount New York does, usually commands a price of 4% to 4.5% of the bank's assets under management, plus its shareholders equity. Discount New York manages assets worth $4 billion, and its equity is about $500 million. We reach a price somewhere below $700 million.

A deeper look at the issue shows that buying the whole Discount bank operation would cost less than buying its New York unit alone. Its market cap is $567 million on the Tel Aviv Stock Exchange, and it would come with Mercantile Discount, Discount Mortgage Bank, a quarter of the First International Bank of Israel - FIBI, several real estate assets, and a million Israeli customers. Moreover: A buyer could take over the 51% held by the State of Israel, instead of having to buy the whole enchilada, as it would have to if buying Discount New York alone.

The Safra brothers are therefore likely to offer a package deal: They will ask to buy Discount in its entirely, and merge it with FIBI, to create Israel's third-biggest bank. Alternatively, they may agree to sell their holdings in FIBI.

Formally speaking, Discount isn't for sale. But in any case, the final word isn't the finance minister's. It lies across the street from his office, at the Supervisor of Banks, Yitzhak Tal. He's the man Joseph Safra should be networking with. He's the man who will decide whether to allow Discount to sell its New York unit, and if so, to whom.