“The Bank of Israel was wrong”: Finance Minister Bezalel Smotrich participated today (Tuesday) in the mortgage advisers’ conference, Smotrich claimed at the conference that the Bank of Israel made a mistake when it raised the prime interest rate component in mortgages: “The decision regarding raising the prime interest rate component was a mistake. The Bank of Israel made a mistake. A serious error that hurt citizens Many. The risk taken was high.” He said to the mortgage advisors in this context: “If those sitting here avoided giving advice like this, you deserve a round of applause.”
“Obviously he made a mistake in the assessment and that’s fine, it’s not an exact science”
Smotrich explained his claim and said: “More than a year ago, the Bank of Israel estimated that interest rates were not going to be raised and greatly increased the prime component in highly leveraged loans where the equity is very low,” Smotrich added: “This contributed to the acceleration of demand. It is clear that he was wrong in his assessment and that is fine , it is not an exact science and it is not a prophecy. He was wrong in increasing the prime component because the great distress of many buyers today is the product. The reality is that it would be a great temptation to increase the prime component which was very low.”
Bank of Israel, interest rates are rising Photo: Yonatan Sindel/Flash90
The government’s steps are already in the upcoming Settlements Law
Smotrich referred to the actions that the government will be required to take in the coming period and said: “Our challenge in the coming years is to maintain the pace of construction starts despite the drop in prices, the rise in interest rates and the drop in demand. To do this we will have to address the credit difficulties for developers and contractors, simplify and shorten the planning and licensing procedures and maintain economic viability in the peripheral areas. You will already see these measures in the Settlements Law and in the upcoming budget.”
Amir Yaron Photo: Spokesperson of the Ministry of Finance
“Deliberate attempts to harm Israel’s economy”
Smotrich added and also referred to the legal reform and the uproar in recent days surrounding the warnings that the reform would harm the Israeli economy: “We are a democratic country and that’s great, we discuss and argue and disagree about the concepts of what is good for the State of Israel. Alas, if we stop arguing, everyone should express their opinion and influence and promote. But One thing must be off limits – deliberate attempts to harm Israel’s economy as part of a political struggle. It should be out of our public lexicon.”