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October 25, 2016 / 23 Tishri, 5777

Posts Tagged ‘banks’

Bolshevik-Like Israel Media Hide Good Economic News

Monday, March 16th, 2015

The Consumer Price Index (CPI) sank 0.7 percent in February, following a 0.9 percent drop in January, but Israel’s media front against Prime Minister Binyamin Netanyahu has buried the report lest people realize the truth.

Netanyahu cannot take any credit for the drop in prices, but reporting good news for the consumers would destroy the myth propagated by the Israeli media establishment that the consumer is worse off than ever under Netanyahu.

The CPI has fallen 1.5 % in the past 12 months and 1.6% for the first two months of this year.

The drop in the price of crude oil was sharper than the rise in the shekel-dollar rate, accounting for a reduction in the price at the pump.

But Internet and telecom services also dropped 2.7 percent last month, another result of the revolution called “free competition” initiated in the Netanyahu administration under the aegis of then-Communications Minister Moshe Kachlon.

Netanyahu on Sunday publicly offered the Finance Ministry post to Kachlon, who left the Likud government and now heads his Kulanu party.

The name “Kulanu” is scary to tycoons.

Immediately after publication of Netanyahu’s offer to Kachlon, the banking index in on the Tel Aviv  Stock exchange dropped by 1.5%. The tycoons are afraid that Kachlon as Finance Minister will cut ridiculously high fees that banks charge customers for everything but breathing.

The Globes business newspaper reported:

Kachlon is promising substantial reforms in the Israeli banking system, especially the opening of the sector to competition, as he did in the cellular market. The stock exchange is listening to him, and in view of the likelihood that he will be appointed Minister of Finance, investors are sending the banks shares…southward.

If anyone thinks he is destroying the ability for companies to profit., take a look at the Cellcom mobile phone company.

Kachlon said several years ago there is no reason that the oligarchy of mobile phone companies should earn billions of shekels a year. Cellcom’s stock was selling at more than $32, and Its shareholders enjoyed a steady 10 percent rise in the price of the stock every year along with a fat dividend of more than 12%.

That was before Kachlon acted, opened the market to free enterprise, which was followed by a 90 percent drop in cell phone rates.

Cellcom’s shares eventually sank to approximately $5, but is the company losing money?

The company reported today its earnings for 2014, and don’t shed any tears for the shareholders.

Net income increased 2.9% compared with 2013.

Tzvi Ben-Gedalyahu

Israel Bank Pays US $400 Million for Ripping Off IRS

Tuesday, December 23rd, 2014

Israel’s Bank Leumi has confessed to helping more than 1,500 U.S. customers evade taxes and will pay the American government $400 million.

The IRS will receive $270 million, and $130 million will go to New York’s Department of Financial Services. Bank Leumi maintains offices in New York, Illinois, Florida and California.

The names of the bank’s American customers involved in the case will be handed over to American investigators.

The Justice Dept. charged the bank with conspiracy but agreed not to prosecute for two years. Bank Leumi officials in the United States met with American clients in parks, hotels and other locations outside the bank to help them hide their assets in undeclared accounts in Israel, Switzerland and Luxembourg.

The bank also provided mail services so account information would not be sent directly  to the clients, who kept their foreign accounts secret from U.S. officials who took out loans on the secret accounts.

Even worse, after the Justice Dept.’s probe of Swiss banks for helping U.S. clients evade taxes, Bank Leumi opened accounts for clients who left the Swiss banks, such as UBS, to help them to continue avoid detection.

New agreements between Israel and the United States have required all bank account information of U.S. citizens in Israel to be exposed to the IRS.

Tzvi Ben-Gedalyahu

Killing Cash

Tuesday, May 27th, 2014

The Israeli government hopes to put the kabash on cash transactions, starting with a plan that places a ceiling on the amounts starting in fiscal 2015 budget.

The director-general of the Prime Minister’s Office, Harel Locker told journalists in a briefing at the beginning of this week the government plans to limit cash transactions between businesses to NIS 5,000 after a one-year period, with the initial phase to begin at just NIS 7,500. Private citizens will be allowed cash transactions of up to NIS 15,000. But if the legislation goes through, the use of checks will also be restricted.

The initiative is aimed at ending the “black economy” that operates in much of the country, Locker explained, adding that  money laundering has risen over the past two years. He pointed to some three million cash transactions, each of which was more than NIS 5,000, that totaled some NIS 273 billion since 2012, as proof that things have to change.

The government, said Locker, has instead decided to take a leaf from the American notebook and is recommending that banks issue debit cards, rather than the VISA and MasterCard credit cards they currently use.

Most Israelis do not carry out transactions for more than NIS 5,000, Locker contended, thus he said it is expected the new plan will not cause difficulties for most of the population.

Nice and tidy — but that may not be the case: newlyweds who are buying furniture and other necessities for new homes often make their purchases with the cash gifts they receive at their wedding. Those shopping sprees are seldom carried out for less than NIS 10,000 and often involve the use of cash for extra bonus points or discount savings.

Other special events and holiday sales also often involve cash purchases as well – a fact the government seems not to be taking into account. Although Locker said he expects approval of the new law by the end of 2014, it is likely there will be more than a few bumps along the way – probably after his colleagues’ spouses find they find they can no longer go shopping without the government getting in the way.

But mostly, this is about too much government intrusion into the private lives and transactions of its citizens, by a government which wants to, invasively, be able to more easily track its citizens down to the smallest detail.

What’s next? Our biometric data on file with the government?


Jewish Press Staff

Israel, U.S. Reach Agreement on IRS Regs for Dual Citizens

Thursday, May 15th, 2014

Americans living in Israel, watch out for this year’s June 30 tax deadline.

The Israel Tax Authority has formally reached an agreement with the U.S. regarding the Model 1 FATCA agreement with the IRS, according to attorney Dave Wolf, of the firm Hacohen and Wolf.

The full details of the FATCA Agreement are yet to be published upon the signing of the FATCA Agreement, but according to the Israel Tax Authority’s spokesman, the agreement contains certain restrictions on the use of information passed to the IRS and relief of reporting for certain institutions.

According to U.S. law, all U.S. citizens — regardless where they live — have an obligation to pay taxes on their worldwide income. In addition, in cases where the aggregate value of all foreign accounts exceeds $10,000 at any time during the calendar year, they also have to report this information on a special form commonly known as the FBAR.

Since July 1, 2013, the FBAR needs to be e-filed before June 30 of the following tax year.

Under FATCA, foreign financial institutions (banks, hedge funds, pension funds, insurance companies etc.) are required to report information to the U.S. tax authorities (the IRS) information about foreign accounts held by U.S. taxpayers, or by foreign entities in which U.S. taxpayers hold a substantial ownership interest.

This means the Israeli financial institutions will have to report to the U.S. government all their clients who are U.S. citizens and/or green card holders, disclosing all these accounts.

This has huge implications for any American living in Israel or abroad who has never reported his foreign accounts or paid taxes on its income to the IRS, and also to some states if applicable (such as NY and NJ).

Individuals have four options with which to comply, according to Wolf, who can be reached at this link for more information.

Jewish Press Staff Reporter

Why Do Some Banks Do Better Than Others?

Thursday, March 20th, 2014

In the second part of this week’s podcast, Charles Calomiris, professor at Columbia University and co-author of Fragile by Design, explains why some countries have established stable banking systems while others often suffer banking crises. Is this due to differences in design or are there other factors involved? Tune into this week’s show to find out.

Doug Goldstein, CFP®

Bank of Israel Orders 50 Percent Cut in Bank Fees

Monday, July 8th, 2013

The Bank of Israel ordered on Monday a 50 percent cut in fees Israel’s banks charge customers’ checking accounts.

The banks make money, piles of it, by milking customers for two transactions for every check – one for the deposit and one for the transfer of funds.

Bank of Israel Supervisor David Zaken ordered a stop to the procedure on Monday, leaving customers to be billed for only once charge per check, Globes business newspaper reported.

Zaken also ordered reforms in the area of stock exchange transactions.

Tzvi Ben-Gedalyahu

US Customers Withdraw $4 Billion from Israeli Banks

Tuesday, July 2nd, 2013

Tighter American tax laws have encouraged U.S. citizens to withdraw approximately $2 billion from Israeli banks in less than two years.

“The blow is not just in the drop in assets, but also in the drop in investments. Some of these customers, especially the wealthy ones, use the money to make investments and acquisitions in Israel. There is now little chance that they will make these investments, after they moved the money back to the US,” a banking source told Globes business newspaper.

In some cases, Americans used the money to buy property in Israel, but most of the money was sent overseas.

The Foreign Account Tax Compliance Act (FATCA) at the end of this year will require financial institutions in foreign countries to report bank accounts and assets held for American citizens, who must pay taxes regardless of where they are living. Approximately 100,000  first-generation American citizens live in Israel.

With the absence of a tax advantage by leaving assets in Israel, many Americans began withdrawing their money from local banks

Managed accounts of Americans in Israel are estimated to be valued at billions of shekels.

Jewish Press News Briefs

Printed from: http://www.jewishpress.com/news/breaking-news/us-customers-withdraw-4-billion-from-israeli-banks/2013/07/02/

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