Bank Leumi CEO: “Foreign executives told me: ‘We will accelerate our investments in Israel’”

“In my recent trip to the U.S. to the IMF conference, I met with many executives from the U.S. and Europe. Most of them told me that they - now - truly envy Israel. More than that. They told me: “we will accelerate our investments in Israel,” Bank Leumi CEO Hanan Friedman said at the Mind the Tech Berlin 2025 conference.

In his opening remarks, Friedman noted: “I am very happy to be here in Berlin, at the first conference we are holding in Germany in several years. The previous one occurred in February 2020. The participants got a special gift from Calcalist. Two weeks of quarantine at home.”

He added that he was “grateful that this is the first conference we've had since October 7th in which all the living hostages have returned to Israel.”

Friedman then turned to the economy. “Over the past two years, many senior leaders in the Israeli economy – myself included – predicted that after the war, Israel will experience a significant economic rebound.

“The business sector and the banking system – supported by the Bank of Israel – worked hard during the war to stabilize and strengthen the economy.

“The responsible actions of the companies, together with the resilience of the Israeli economy, are the foundation for the growth that will come after the war.”

He explained why foreign CEOs expressed envy: “The reason is simple - both the U.S. and Europe are facing real challenges in growth creation.”

Friedman pointed to the strength of the Israeli financial sector. “Let's take for example, investment in S&P 500 index – the most popular global index. If we compare the performance of the S&P 500 to that of the Israeli Banks Index over the past ten years, five years or one year, we can see that those who invested in the S&P earned far less. And this is in a period that included the longest war Israel has ever experienced.

“The numbers speak for themselves: An investment in the S&P 500 in the last five years yielded a return of 95% - almost doubling the investment. An impressive result by all accounts.

“But, an investment in the Israeli Banks Index generated more than 320%! These are incredible results.

“Let me be clear: the outperformance of Israeli bank shares is not a one-time event. This trend has been consistent and ongoing, mainly driven by the strong business performance and resilience of the Israeli banking system – even in difficult times.

“And this is just one example. There are several other successful business sectors in the Israeli economy that provide a solid base for growth.

“Of course, the high-tech sector is the leader.”

Here Friedman turned to what he called the critical obstacle. “But - and this is a huge “but" - there is one barrier that could affect our ability to grow after the war. This must be eliminated in any way possible.

“I am talking about excessive bureaucracy and over-regulation.

“When you add that, to the populism against the business sector, you get a disturbing picture, one that could threaten our growth potential. And even worse - it could discourage major international investors from investing in Israel.

“Distinguished guests, while foreign investors say that they admire the Israeli economy for its incredible growth potential in the coming years, they also ask serious questions before taking a decision to invest.

“They ask themselves: will bureaucracy and heavy regulation in Israel harm our investment? Could it eliminate our exit strategy going forward? Might the cost of doing business be even worse in the coming years?

“I believe that anyone who really cares about the future of the state of Israel should take these questions seriously, and make everything possible to change the current situation.

“Supervision and effective regulations are critical, but they should be balanced in line with the costs they create.”

Friedman added: “Today, the cost of doing business in Israel, as well as the time to completion for major projects, has become unreasonable. The benchmark should always be the leading OECD countries.

“Without reducing excessive regulation and bureaucracy - Israel will not be able to accelerate growth after the war. And that would be a shame, because Israel has everything it needs to succeed: A superb tech sector, full of talented entrepreneurs - many are here in the audience; world-leading AI technologies and entrepreneurs; a stable financial system; a strong defense industry; and much more.

“The potential is greater than ever.

“And unlike crises of the past, for example after the Yom Kippur War, today most of the Israeli economy is in private hands. This means that the potential for rapid growth is far greater than in the past.

“Israel’s economic growth could reach three times higher than the OECD average in the coming years.

“But for this to happen, we must fight bureaucracy and over-regulation in full force. And at the same time, the populist attacks on the business sector must stop.

“The business sector drives growth; the business sector strength is a major component of the national resilience. And I remind you all – everyone in Israel will be benefited from the economic growth.”

In conclusion, he said: “Releasing barriers, reducing regulation that prevents the development of essential infrastructure projects, cutting bureaucracy and stopping populism - these are the conditions for the post-war rebound.

“Only then can we lead the Israeli society into a new era of growth and prosperity.”