"We were not hurt by the financial crisis of 2008 because we acted according to the philosophy of Ayn Rand – we are not dealing with matters that are of no real value. Not all the means of making money are legitimate," says Lars Christensen, co-founder of the Danish Saxo Bank to Israel Hayom.
I met Christensen at the annual Ayn Rand Institute conference in Prague.
The institute's first annual conference held outside the United States, it was attended by 400 students from around the world, and more than 30 students from Israel.
Christensen is a member of the institute and one of the lecturers at the conference.
"Israel is a wonderful place for entrepreneurship and innovation and I love Israel and invest in companies in Israel," he tells me.
After I ask him about the regulatory environment in Denmark, he takes air and his face turns grim: "It's going downhill. In one of the last meetings of the bank's board, we discovered that all the members of the board no longer live in Denmark and I, myself, live in Switzerland. The constantly changing regulation and new laws are hurting business."
"How many banks are there in Denmark?" I ask and he surprises with the reply. "Something like 100." It turns out that, until recently, there were very lax rules for creating banks in the country and many investment houses received licenses for banking activity.
Saxo was also licensed in 2001, nine years after it was established as an investment house. It specializes in modern technologies of digital transfers and almost all institutions in Denmark, including banks from all over the world, use its platforms at a volume of about €15 billion ($17 billion) a day.
However, customers are not aware of the bank's services because they are held under the "White Label" – an interbank agreement that keeps the bank's services under wraps.
As a result of the tightening of regulation, Christensen sold his holdings in the bank for more than €300 million ($340 million) and became a private investor. "I'm doing things I like to do now; it's also part of Ayn Rand's concept of doing what you enjoy doing."
When I tell Christensen about the banking system in Israel – that even though our GDP is larger than that of Denmark, there are 20 times fewer Israeli banks – he is astonished but also understands: "Well, you built a country on a socialist foundation."
In Israel, the prevailing view is that Denmark is socialist, but Lars Løkke Rasmussen, the Danish prime minister, has made it clear that "we are a market economy."
The Danish system is called "Flexsecurity" – flexible security. On the one hand, trade unions are very strong and involved in managing companies, but on the other hand, they do not demand tenure and negotiate with the management what minimum wage is, depending on productivity.
However, as noted, Christiansen is far from satisfied with the method and clarifies, "This is probably no longer good for entrepreneurs."
This week, I told Bank Hapoalim CEO Arik Pinto about the lack of competition in the banking sector in Israel. "I'm in favor of competition; I never objected to it," he replied, "The competition today is not with other banks but with nonfinancial companies and with new technologies. Amazon functions like a bank and has its own credit card.
"We also want to enter this competition. We came up with the BIT application, which serves customers from all banks. It does not make sense to have the regulators today stifling competition in this area," he says.
I asked Christiansen if the new technologies would bypass the traditional banks. He replied, "I think not. This is a very conservative area and it will be very difficult to break the regulation that maintains the structure of the banks. But it is clear that the banks will be transformed due to technological innovations."
Pinto similarly estimated that "the banks will look completely different, the customers will be able to do most of the work without reaching the bank and we will have to invest a lot more in technology," he said.
As to the question of whether Bank Hapoalim has the flexibility to make far-reaching changes, despite the unions, he replied: "We have no problem with the unions and we are working together; we have already made major changes in manpower and in the bank's organizational structure."
