Jerusalem, March 29

Israel's parliament has passed a law capping the annual salaries of bank executives at $658,000, described as among the world’s toughest such restrictions.

The law, passed by the Knesset late Monday, says no salary in the financial sector can be more than 35 times that of the lowest-paid worker in the same company, with a ceiling of 2.5 million shekels ($658,000, 584,000 euros).

A parliament statement issued just before midnight, quoting Finance Committee Chairman Moshe Gafni, said the law 'deals with a problem of morals and values concerning the excessive salaries of those who undertake to manage the public’s money'.

The Association of Banks in Israel is said to be considering an appeal to Israel’s supreme court against the legislation but it had no official comment today.

Israeli media have described the measure as unprecedented in its severity and some have warned it could harm the Jewish state’s economy.