The Sale of Credit Card Companies to Institutional Entities

The Brandeis Institute research, conducted by Dr. Efrat Dressler, examined the concentration and interrelationships between institutional entities and the main credit providers in the Israeli economy. The study identified a high level of such interrelationships and pointed out various entities, including the Phoenix Company and the Clal company, whose network of cross-holdings (through Colleagues’ and Savers’ funds) is very unusual. The research played a crucial role in preventing the takeover of the Phoenix Company by Emirati funds. It is now of utmost importance that the public’s long-term savings are invested and managed by those who can be optimally monitored.

Based on this research, the Brandeis Institute submitted a policy paper to the Committee appointed by the Minister of Finance to examine the sale of the Cal credit card company by Discount Bank. The policy paper warned of the expected competitive problems in transferring control over the credit card companies from the banks to institutional entities, such as major insurance groups.