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"It's mostly noise": an American bank claims that the fears of the legal reform are exaggerated Israel today


According to a review by the "JP Morgan" bank, the economic consequences expected from Levin's plan are not as significant as many claim.

"It has a limited financial impact":

The American bank "JP Morgan" presented a position completely different from that of the hundreds of senior economists who this week expressed their concerns about the possible damage of the legal reform to the Israeli economy.

A review by the bank's economists states: "The talk surrounding the danger to the Israeli economy is mostly noise and does not change our assessment that the shekel is on a strengthening trend. Israeli institutions are strong."

It also states that: "Although this policy may be controversial locally, it has a limited financial impact, unless we see a real deterioration in the fiscal situation or the independence of the Bank of Israel (neither of which seems likely for now)."

It should be noted that the review was sent on Thursday afternoon. Following it, last Friday Netanyahu held a meeting with senior officials of the economy, during which the bankers warned him of the withdrawal of deposits from Israeli banks that began last week. In response, the bank index was cut today by almost 5% in trading on the Tel Aviv Stock Exchange.

Contrary to the current position after Netanyahu's meeting with the banks last weekend, the economists of the American investment bank "Goldman Sachs" wrote in their weekly review that the shekel may continue to weaken in the short term due to the uncertainty surrounding the legal reform.

Earlier last week, the banks UBS and Bank of America expressed a similar position and wrote that they recommend buying the dollar against the shekel, but did not link their recommendation to the legal reform, but to the government's fiscal measures.

One way or another, time will tell to what extent the legal reform will affect the Israeli economy.

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Source: israelhayom

All news articles on 2023-01-29

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