Today I’d like to give a brief overview of the changing landscape of the financial market in Israel, and particularly to highlight how recent legislation is expected to affect it. Particularly I’d like to discuss three central issues that are always present in any discussion of financial intermediation: the size of the system, its competitiveness and its stability and credibility.
This is because firms take a long time to adapt their business models and processes to the new technologies. And the greatest spur to change is capacity constraints. Tight economies spur process innovation. When there is plenty of spare capacity, not even strong competition necessarily induces higher rates of adoption of new technologies.