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The Functions of the Bank of Israel
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Managing monetary policy
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Holding and managing the foreign currency reserves of the State
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Supporting the orderly activity and stability of the financial markets
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Acting as banker of the Government
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Regulating the economy's payment and clearing systems
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Issuing Currency and regulating and guiding the cash system of the economy
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Supervising and regulating the banking system
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Adviser to the Government on economic matters
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Collating and disseminating information and data on Israel's economy
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Representing Israel in the International Financial Institutions
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to list of functions 
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Managing monetary policy
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As stated in section 4(1) in the Law, one of the Banks functions is "managing monetary policy", the Bank's major area of responsibility and the focus of its influence on the economy. The main objective of monetary policy is to maintain price stability in order to help to create a business environment that supports sustainable economic growth. Price stability is defined in terms of an inflation target that the government has been setting since 1992. The objective of monetary policy is to attain the target.
To attain the inflation target, the Bank of Israel sets the level of short-term interest rates. Too low a level of interest would lead to overexpansion and inflationary pressures, while too steep a rise in the rate of interest would result in excessive restraint of economic activity. Monetary policy, through the interest rate, also affects inflation expectations of the public (individuals and companies) as the public makes decisions on the basis of its expectations.
Experience in Israel and abroad shows that inflation has a distorting effect on vital aspects of the economy--production, consumption, foreign trade, the labor market, and the financial markets--to the detriment of stable economic growth. Hence the importance that the Bank of Israel (like other central banks) attaches to the battle against inflation.
Each month, the Bank of Israel determines the level of interest that is needed to maintain price stability (or to converge into the range defined as price stability within a reasonable period of time), and to support financial stability, and attain the government's other objectives, foremost growth and employment. To make this decision and as a basis for formulating monetary policy, the Research Department and Market Operations Department provide the state of the inflation environment and the forces that affect it by analyzing current information about activity, the labor market and prices, capital-market indicators, and using quantitative empirical models that the Bank has developed to predict inflation.
The monetary policy that the Bank of Israel determines is implemented by the Markets Department via a range of monetary instruments-monetary auctions, makam auctions, and repo auctions-and, when necessary, by intervening in makam and bond trading on the securities exchange.
Monetary auctions for deposits from and/or loans to the banks serve as a major instrument due to the precision and speed of their effect. Through them, the Bank of Israel can affect the money supply and the short-term rate of interest in the money market, thereby preventing undesirable fluctuations in the monetary base resulting from a temporary increase in government monetary activities (e.g., tax collection, net borrowing, or domestic payments). Monetary auctions to the banks are for various fixed periods of one day and one week. When the banks take monetary loans, they provide collateral in the form of government bonds and makam.
Overnight loans: Since September 1, 2005, the Bank of Israel has made a window available to the banks for monetary loans, without a quota, at an interest rate currently 0.5 percent above the Bank of Israel published rate. The loans are provided for one day, against collateral, and repaid automatically the next business day.
Overnight deposits: Since September 1, 2005, the Bank of Israel has made a window available to the banks for local-currency deposits, without a quota, at an interest rate currently 0.5 percent below the Bank of Israel published rate. The deposits are for one day and are repaid automatically on the next business day.
The makam (a Hebrew acronym denoting "short-term loan") is a short-term security (up to one year) that the Bank of Israel issues to affect the mnetary base and the rate of interest in the money market. The sale of makamto the public reduces the monetary base, and thus serves to restrain activity and inflation. The purchase of makam by the Bank of Israel or their redemption by the public injects money into the market and thus encourages economic activity. Makam resemble deposit auctions in their effect on the monetary base, but because they are issued to the public and their yield is determined in trading on the stock exchange, they reflect the public's expectations regarding inflation and changes in monetary policy, information that helps the Bank of Israel to plan its monetary steps.
Repo-the Bank of Israel has been performing repo transactions in the capital market since October 17, 2007. In this activity, which it performs by way of auctions, the Bank purchases bonds and makam from institutional entities and banks and sells them back a week later at a predetermined price (as distinct from the repo transactions that the Bank performed in 2004-2006, in which it sold makam and bought them back a week later). Repo is one of the most important financial instruments in the international markets; the number of transactions culminated in this manner in developed markets is growing steadily. Repo transactions are among the most important tools for the management of interest rate policy by central banks in many countries.
The reserve requirement obliges banks to deposit with the Bank of Israel a certain proportion of the money deposited with them by the public. Until the early 1990s, the Bank of Israel used changes in the reserve requirement as an instrument of monetary policy, but it no longer does so, and the level of the requirement is similar to that in the industrialized countries.
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Holding and managing the foreign currency reserves of the State
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Section 4(2) in the Law states that one of the functions of the Bank of Israel is "Holding and managing the Foreign Currency reserves of the State." The reserves serve two purposes: : (1) potential uses of the reserves, i.e., the possibility of selling them (in exchange for domestic currency) or lending them, with the main use being the sale of foreign exchange to the government for the servicing of its debt; and (2) economic utility arising from the very fact that the State of Israel possesses a certain quantity of foreign exchange reserves, such as reducing the probability of a crisis in Israel's foreign exchange market and improving Israel's international financial standing. The functions of the reserves serve as a basis both for determining their desired size and for defining the investment policy that the Market Operations Department uses in managing them.
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The Bank of Israel, like other central banks, manages the reserves on the basis of a cautious approach that has three main goals in mind:
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preserving the value of the reserves in terms of their uses;
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managing the reserves at a high level of liquidity;
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earning a reasonable yield on the reserves portfolio without contravening the previous two principles.
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Accordingly, the reserves are invested primarily in liquid or relatively short-term assets and in a mix of currencies that corresponds to the reserves' expected uses. The reserves are invested in overseas financial markets, deposits with foreign banks, foreign government bonds, and other financial instruments as the Bank of Israel Law allows. To make its investment decisions and determine changes in the portfolio, the Department constantly monitors developments in financial markets abroad.
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Supporting the orderly activity and stability of the financial markets
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The financial system occupies a central position in the economy; therefore, its efficiency and stability are essential for economic development and the realization of the economy's growth potential.
The financial system comprises three components:
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Financial institutions, centering on the banking system and encompassing institutional investors (pension funds, insurance companies, provident funds, and supplementary -education funds) and other financial entities (portfolio managers, underwriters, consultants, etc);
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Financial markets-money market, foreign-currency market, stock market, bond market, and derivatives market;
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Payment and settlement systems.
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Responsibility for the stability of the banking system lies with the Banking Supervision Department of the Bank of Israel. Responsibility for the stability of the other financial institutions lies with the Commissioner of the Capital Market, Insurance and Savings of the Ministry of Finance, and the Securities Authority is responsible for the proper functioning of the securities market. Maintaining the stability of each of the separate components of the financial system does not itself ensure the stability of the whole system; an overall view of the system is needed. This is due to the increased sophistication of the financial markets, their close interdependence, the interrelations between the different types of financial institutions and between them and the financial markets, the complex dynamic processes within the financial system, and the instantaneous effects of external shocks on the system's components.
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The Research Department, in its capacity as monitor and promoter of financial stability acts to enhance the stability of Israel's financial system by:
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encouraging reforms and changes in the infrastructure of the financial markets and financial institutions;
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formulating policy recommendations in this sphere;
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developing tools for the anticipation of threats to stability, the prevention of blows to stability, and responses to situations that undermine stability;
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gathering and analyzing data and information about the financial system and constant monitoring of developments in it, focusing particularly on risks;
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coordinating the actions of other supervisory authorities and entities;
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representing the Bank of Israel in contacts with international organizations involved in the subject;
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studying, researching, and disseminating knowledge of the subject;
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publishing data, information, reviews, and studies on the subject.
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Regulation of Foreign-Currency Trading and Publishing the Representative Exchange Rate
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The Market Operations Department] of the Bank of Israel monitors ongoing developments in the foreign-currency market, analyzes them, and implements the Bank's exchange-rate policy. Foreign-currency trading takes place mainly between banks and their customers in Israel and abroad and among banks themselves. Today, the exchange-rate policy is based on unrestrained fluctuation of the domestic currency against other currencies. However, the Bank reserves the right to intervene in foreign-currency trading when necessary. In the early 1990s, foreign-currency control was gradually repealed in a liberalization process. Today, no control restrictions exist.
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Section 4(3) in the Law states that one of the functions of the Bank of Israel is "Supporting the orderly activity of the Foreign Currency market in Israel." In this capacity the Market Operations Department monitors market performance.
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On each foreign-currency business day in Israel, the Bank of Israel publishes the representative exchange rate of the Sheqel against foreign currencies. The representative rate is based on the rate prevailing in the market at the time it is set. Importantly, the representative rate is an indicator of the exchange rate in use but has no obligatory status under law. Accordingly parties to transactions that are indexed to foreign currency may use any exchange rate on which they agree.
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Acting as banker of the Government
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In this capacity, the Bank of Israel operates in three areas:
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The State Loans Administration administers the government's domestic loans, both non-compulsory (negotiable or non-negotiable) and compulsory, with the exception of loans issued under the State Loans Law, 5739-1979, responsibility for which was transferred to the Ministry of Finance on June 15, 2006. The Administration is also responsible for the redemption in Israel of foreign loans (State of Israel Bonds).
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The Administration records receipts from the sales of bonds and payments to bond and securities holders, maintains the register of holders of non-negotiable State loans and securities traded on the Stock Exchange, and in this regard acts as the coordinating bank for short-term government securities (Makams).
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The Administration prepares and publishes directives relating to repayment of loans and determines and calculates the amounts of repayment of principal and interest.
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As manager of the compulsory-loan databases, the Administration is able to perform lawful transfers of loan certificates and make payments on account of the redemption of such certificates. It also advises the public about redemption options and provides up-to-date and detailed information in all matters relating to these loans.
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By consulting the Bank's Web site, individuals may determine whether or not they are entitled to redeem compulsory-loan certificates in their possession.
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Banker of the government:
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Section 48(a) states that "The Bank shall be the sole banker of the Government in its Banking Activity in Israeli Currency." Accordingly, the government manages all its domestic-currency accounts and some of its foreign-currency accounts with the Bank.
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The Government may, with the agreement of the Bank, as stated in Section 48(b) in the Law, "obtain certain services from Banking Corporations or Financial Entities, provided this be done only in order to manage the Government's debt and fiscal activity." The government manages domestic- and foreign-currency accounts for its budgetary and extra-budgetary activity in Israel and abroad, for financial transactions vis-?-vis the Bank of Israel, and for the financing of activity unrelated to the budget, with the Bank of Israel.
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The Comptroller of the Bank of Israel manages the government's domestic- and foreign-currency accounts with the Bank and provides the government with normal banking services-making and receiving payments for and on behalf of government ministries and auxiliary units, calculating interest on the government's interest-bearing accounts, preparing daily account records, confirming balances, etc.
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Banker of the banks: the banks deposit money with the Bank of Israel, in both domestic and foreign currency, in various types of deposits; some under the reserve requirements and some deposits of surplus cash made at the banks' own initiative-interest-bearing fixed-term deposits in local or foreign currency. The current accounts that the banks maintain with the Bank of Israel are used for the management of liquidity and for final settlement (the paper-based clearinghouse known as the Bank Clearing House or simply BCH; the banks' automated clearing house-ACH or Masav, its Hebrew acronym-and the Tel Aviv Stock Exchange, abbreviated as TASE). These accounts are managed by the Comptroller of the Bank of Israel.
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In addition, the Bank of Israel provides banks with monetary loans by auction, discount-window ("overnight") loans, and settlement services for USD-NIS transactions that they conclude with each other using the "payment versus payment" method.
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The banks' domestic-currency clearinghouse, which settles checks and digital transactions, is supervised by the Clearing House Committee, appointed by the Governor of the Bank of Israel and composed of representatives of the Bank of Israel and the commercial banks. At the checks clearinghouse, managed at the Bank of Israel, representatives of the banks exchange checks and payment instructions once a day. This clearinghouse, situated near the banks' headquarters in Tel Aviv, processes hundreds of settlement actions every day, mostly in checks, at a financial value that adds up to hundreds of billions of NIS each year.
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Regulating the economy's payment and clearing systems
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Payment and settlement systems are vital parts of the economic and financial infrastructures of modern economies, and their efficient functioning contributes to the economies' development and financial stability. Section 4(5) in the law states that one of the bank's functions is "Regulating the economy's payment and clearing systems so as to ensure their efficiency and stability".
The Bank of Israel acts in various ways to promote the safety, reliability, and efficiency of payment and settlement systems and to mitigate settlement risks. In this context, the Bank carried out a comprehensive reform of Israel's payment and settlement systems in recent years in order to meet international standards set forth by the Bank for International Settlements (BIS).
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The jewel in the crown of this reform was the establishment of a Real Time Gross Settlement (RTGS) system, known in Israel as ZAHAV (a Hebrew acronym for "real-time credits and transfers" and a metonym denoting "gold"). The system, inaugurated in July 2007, is managed by the Payment and Settlement Unit of the Bank of Israel.
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With the activation of ZAHAV, Israel's financial system completed an important move that positioned it among the world's most advanced countries.
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The launching of ZAHAV also allowed the NIS to be integrated into clearing at the CLS (Continuous Link Settlement) Bank, significantly reducing the risk associated with conversion of the NIS into currencies that participate in the CLS settlement system.
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The Bank of Israel's Payment and Settlement Systems Unit discharges the following main duties:
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Policymaking in regard to payment and settlement systems, including initiating reforms and changes in these systems, doing the same in regard to means of payment, bringing the payment and settlement system into compliance with accepted international standards; collecting and managing information about payment systems in Israel for cross-country comparison; maintaining ongoing relations with international entities and other central banks in regard to changes and trends in this field; establishing principles and standards for the business continuity of payment systems; and providing information and instruction to those involved. As the operator of the ZAHAV (RTGS) system, the Bank of Israel is asked to determine and to periodically update the rules for the system's activity. These rules are part of the agreement that exists between the Bank of Israel and the commercial banks and the payment systems that participate in ZAHAV.
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Supervision of payment and settlement systems in order to assure their stability and safety, including supervision of audited payment systems as this term is defined in the Payments and Settlement Law, 2008; supervision of CLS Bank in conjunction with other central banks whose countries' currencies are settled by CLS; establishing supervisory principles and regulations for each clearinghouse; gathering information for use in declaring a payment system as an audited one; writing periodic and annual audit reports; and participating in international forums that deal with the supervision of payment systems.
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Operation of clearing houses-the Bank of Israel operates the ZAHAV system and the paper-based (checks) clearing house. As such it is responsible mainly for the following: regular monitoring of the activity in the systems and of their users in order to anticipate failures; dealing with operating, technical or business failures of the system or of users; providing regular telephone support for system participants (commercial banks, the Postal Bank, other clearinghouses); and monitoring and control of NIS settlements by CLS via ZAHAV.
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Managing the channels of communication-the activities of the systems for which the Payment and Settlement Systems Unit in the Bank of Israel is responsible require electronic links with financial institutions in Israel and abroad. These links are maintained by means of various communication interfaces and appropriate applications, including "Shva," "Kasefet" and a system that sends and receives secured dedicated electronic messages between financial institutions around the world, managed by the international organization SWIFT. The Unit is responsible for managing the channels of communication to the participants in the SWIFT system and providing communication services to other parts of the Division, including providing solutions to non-technical problems and the design of new communication-related solutions.
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Issuing Currency and regulating and guiding the cash system of the economy
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Section 44(a) in the Law grants the Bank of Israel the sole right to issue currency in Israel (banknotes, coins, and commemorative and special coins). The quantity and value of banknotes and coins in circulation are affected by several factors, such as changes in the extent and number of transactions, the rate of inflation, population growth, and the use of automated teller machines, checks, and credit cards.
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Section 4(6) in the Law states that one of the bank's functions is "Issuing Currency and regulating and guiding the cash system of the economy". Accordingly, one of the funcrtions of the Currency department is to ensure a regular supply of banknotes and coins in accordance with public demand. This involves action at several levels:
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Planning denominations - Planning the appropriate denominations of banknotes and coins that will concurrently enable the public to carry out its cash transactions efficiently and minimize the cost of issuing new currency.
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Designing banknotes and coins - The Governor of the Bank of Israel determines the form of banknotes and coins with the approval of the Administrative Council and the Government. (as per Section 42 in the Law). For this purpose, the Governor consults with the Public Committee for the Planning of Banknotes and Coins, which reviews the various proposals and chooses those that will be presented to the Governor for approval.
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Ordering banknotes and coins - By correctly predicting demand for banknotes and coins and planning the ordering and supply by means of international tenders, maximum savings can be made in stockholding costs and the inevitable expenses incurred in every order. Banknotes are printed and coins minted abroad, since the requirements of Israel's economy do not justify the establishment of a printing press or mint in Israel.
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Storage - When they arrive from abroad, banknotes and coins are stored in the vaults of the Bank of Israel, requiring strict transport arrangements, rigorous security, and meticulous control.
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Supply of cash - Cash is supplied to the public via the commercial banks and the Postal Bank, which order the required quantities from the Bank of Israel in accordance with supply and demand expressed by deposits and withdrawals made by the public.
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Overseeing the quality of currency in circulation - Banknotes that the banks deposit with the Bank of Israel are carefully counted and authenticated, using sophisticated equipment that also sorts the notes into those which are reusable and those to be shredded. Degraded coins are destroyed.
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Prevention of counterfeiting - The Department takes action to detect counterfeit banknotes and remove them from circulation by studying the characteristics of counterfeits in the market, upgrading the safety markings that appear on currency, enhancing the public's awareness of these markings by advertising and instructional activities, and cooperating with the police, the Association of Banks, the banks, and international organizations that are active in the war on counterfeiting.
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Issuing commemorative coins - The Governor determines the form of commemorative and special coins per approval of the Administrative Council and the government. For this purpose, he/she avails him/herself of the Public Committee for the Planning of Banknotes and Coins. The Bank issues commemorative coins annually and for special occasions. These are generally made of gold or silver and are sold to collectors and the public through the Israel Government Coins and Medals Corporation, Ltd.
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Service to the public - Exchanging old currency for current legal tender, making change and exchanging coins for banknotes, and replacing degraded currency.
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Information for the public - The Department responds to enquiries from the public on currency-related topics and publishes information about safety markings on currency.
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Supervising and regulating the banking system
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The banking system plays a central role in every advanced economy: it is there that the public deposits the bulk of its financial savings, which the banks use to provide credit to firms and households, among other purposes. Most payments are made via current accounts (demand deposits) which are managed by the banks; foreign currency transactions are also usually executed via the banks.
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The vital services that the banking system provides and the awareness that any failure of this system would seriously prejudice the functioning of the economy necessitate the existence of a banking-supervision system. As stated in section 4(7) in the law, one of the tasks of the bank's is "supervising and regulating the banking system".
These are the functions of the Banking Supervision Department:
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supervising the stability of banking corporations with a view to protecting depositors' money;
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ensuring proper conduct of banking corporations;
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assuring fair business relations between banks and their customers.
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The Supervisor of Banks is appointed by the Governor of the Bank of Israel. Two committees operate alongside the Supervisor:
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The Licenses Committee advises the Governor and the Supervisor on the issuance of licenses for the establishment of a banking corporation, the acquisition of a controlling interest in a bank, and the licensing of bank branches. It is also consulted when legal steps are being considered to ensure the stability of a bank where mismanagement has been found.
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The Advisory Committee on matters related to banking business is consulted by the Supervisor of Banks on the issuance of new Proper Conduct of Banking Business Regulations.
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The duties and powers of the Supervisor of Banks are based on several laws:
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The Banking Ordinance, 1941, a Mandatory ordinance which has been amended and updated over the years;
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The Banking (Licensing) Law, 5741-1981;
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The Banking (Service to Customers) Law, 5741-1981;
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The Checks Without Cover Law, 5741-1981.
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The Banking Supervision Department uses various mechanisms in the performance of its duties:
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Licensing procedures, in particular permits from the Governor, are required by a corporation that wishes to be a banking corporation, and by anyone who wishes to acquire 5 percent or more of shares in a banking corporation. Permits are granted after thorough investigation by the Banking Supervision Department and consultation with the Licenses Committee. The licensing procedures are intended to ensure banks' ability to operate, as well as preventing elements that are unsuitable-in terms of financial standing and integrity-from engaging in banking business or from owning or having material influence on a banking corporation.
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Setting norms and limitations: banks' activities are restricted to ensure proper management and risk control. Within this context, the Supervisor of Banks may introduce provisions concerning the composition of the board of directors of a banking corporation and its methods of operation, adequate minimum capital requirements commensurate with the extent of the bank's risk assets, limitations on the maximum amount that may be lent to a single borrower and to parties connected with the bank (owners and executives), etc..
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Inspection and assessment: each bank's books are examined and its performance analyzed on the basis of the extensive information that comes into the Supervisor's possession. The purpose of these activities is to assess the bank's strength and business situation, prevent the taking of excessive risks, and ensure compliance with the Supervisor's Proper Conduct of Banking Business Regulations. On the basis of its findings, the Banking Supervision Department takes the required steps to correct deficienciesand, in serious cases, imposes sanctions on the offending bank and its executives.
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Encouraging market supervision: monitoring of banks and their activities by customers and markets is an important part of banking supervision. The Bank of Israel acts to reinforce this aspect, mainly by expanding the requirement that banks disclose relevant information about their soundness, their customer-service activities, and their charges. The Supervisor's instructions regarding the format of the financial statements that banks must publish is one of the world's most advanced; it includes all information required to analyze the bank's development, profitability, and risks. The Banking Supervision Department has also extended the banks' obligation to give customers detailed information about the interest rates they charge and pay, the fees they charge for services and arrangements governing the contractual relationship between them and their customers.
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Enquiries from the public: customers who feel that they have been mistreated by a bank may complain to this unit, which investigates the complaint and advises both the customer and the bank of its findings. If the complaint is found to be justified, the bank is required to rectify the situation.
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Research: the Supervisor of Banks publishes research studies in the field of banking, most of them in the Banking Review, as well as a Working Paper Series (Hebrew), and an Annual Survey, in which developments in the banking system are described and analyzed.
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Iinformation and Reporting - The Banking Supervision Department pools and analyzes data that the banks submit regularly to the Bank of Israel, for use by the Department's different units in performing their functions.
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Adviser to the Government on economic matters
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The Bank's Research Department assists the Governor in preparing policy recommendations and assessing policy in his/her capacity as the government's economic advisor (as stated in section 7(b) in the Law)). The Department also monitors and analyzes economic processes and distributes its findings to decision-makers-the government, Knesset committees, the public, and international and other organizations. Finally, it creates a research infrastructure for intelligent policy decisions.
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The ongoing analyses and studies help to understand economic processes, macroeconomic trends, professional discussion of policy proposals, and the economic analysis that underlies the policy formulated by the Ministry of Finance, including the construction of the budget. The ongoing analysis also helps to detect impending risks to growth and stability and to adopt timely preventive policies.
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The Bank's economic research takes place on three major paths:
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Monitoring and analysis of local economic developments: the main results are published in the Bank of Israel's Annual Report , which is submitted to the government and the Finance Committee of the Knesset as required by the Bank of Israel Law, and in the inflation reports and the quarterly publication Recent Economic Developments .
The Research Department also carries out and publishes the results of a quarterly survey of some 750 manufacturing firms and 300 companies in a variety of other industries, and publishes a monthly state-of-the-economy index.
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Economic policy proposals: the Department's economists participate in shaping economic policy as members of the socioeconomic agenda committees (in conjunction with the Ministry of Finance and the Prime Minister's Office). The Department also prepares economic-policy proposals at its initiative in accordance with the changing needs of the economy. Salient examples of this are its participation in preparing the economic stabilization program (1985), putting together the economic outlook behind the program for mass immigrant absorption in the 1990s, and money- and capital-market reforms. The Department also examines policy proposals put forward by other organizations and participates in formulating the Bank's response to them.
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Basic and applied research: the Department's economists investigate various domestic economic issues in a broad range of domains: the pass-through mechanism of monetary policy, domestic supply and demand of goods and services, capital market, balance of payments, prices, principal industries, labor market, the government budget, government economic policy, etc. These studies are published regularly in the Discussion Papers series, the Bank of Israel's Economic Review (Hebrew), Israel Economic Review (IER), and other professional journals published in Israel and abroad. The studies both identify and analyze fundamental economic processes domestic and various policy issues.
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In the Bank's capacity as the government's economic advisor, the Research Department develops analytical tools and performs quantitative policy analyses. One such tool analyzes the long-term effects of budget policy; another is a macroeconomic model that predicts tax receipts, making it possible to test the reasonability of the budget's revenue estimates.
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The Department's economists participate in various professional committees and contribute their vast knowledge to the panels' purviews (e.g., elements of the government's socioeconomic agenda; policymaking related to the hiring of Israelis in the construction industry; the introduction of an Earned Income Tax Credit; examination of the defense budget (the Brodet Committee), and preparations for sessions of the Caesarea Conference). The Department also helps international agencies such as the IMF and the OECD to obtain an up-to-date picture of the domestic economy and economic policy issues.
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Collating and disseminating information and data on Israel's economy
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To manage monetary policy, maintain financial stability, perform economic research, and discharge its other duties, (as detailed in section 4 in the law) the Bank of Israel needs high-quality and up-to-date information and data. The Information and Statistics Department] meets these needs.
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The Information and Statistics Department allows decision-makers, researchers, and other players outside the Bank to access information and data as part of the effort to enhance transparency and efficiency in the economy at large. For this purpose, the Department disseminates data, information, and reports in various ways-foremost at the Bank's Web site, where it posts regular press releases and other publications.
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In its programs for the improvement and development of statistics at the Bank of Israel, the Department adheres to several main principles:
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Maintain transparency in methods of gathering and processing data.
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Maintain information confidentiality as required by law.
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Make information-raw and processed-available via periodic and other reports and additional products.
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Comply with strict international and professional standards in respect of statistical methodology and collection and dissemination of information.
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Work in cooperation and coordination with the Central Bureau of Statistics, the Tel Aviv Stock Exchange, the Securities Authority, the Ministry of Finance, and additional authorities and entities.
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Maintain efficiency in the collection, management, and availability of information for customers, without losing sight of the burden of reportage that the rapporteurs must bear.
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The Information and Reporting Unit of the Banking Supervision Department publishes comprehensive and regularly updated data on the banking system and annual data on banking corporations that originate in the banks' reportage to the Banking Supervision Department. The Unit also publishes quarterly data about the banks, based on public financial statements, and various interest rates that the banking system uses, including those relating to mortgage loans.
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Representing Israel in the International Financial Institutions
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As stated in section 82(a) in the law "The Bank shall represent the State in any matter relating to the membership of the State in the […] international financial institutions".
The Bank of Israel represents the State of Israel in the financial institutions in which Israel is a member, including:
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The International Monetary Fund (IMF);
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Members of the World Bank group of institutions-the International Bank for Reconstruction and Development (IBRD); the Multilateral Investment Guarantee Agency (MIGA); the International Finance Corporation (IFC); and the International Development Agency (IDA);
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The Bank for International Settlements (BIS).
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The Bank also represents Israel in regional development banks:
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The Inter-American Development Bank (BID);
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The European Bank for Reconstruction and Development (EBRD).
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The Organization for Economic Cooperation and Development (OECD)--in May 2010 the OECD accepted the State of Israel as a full member of the organization., The Bank of Israel has regular relations with the Organization, participates in its various committees, and has played an important role in the accession process.
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The Information and International Relations Division of the Bank of Israel maintains regular relations with these international financial institutions in various domains: participation in discussions and exchanges of views, voting, hosting of professional delegations, placement of Israeli experts in professional delegations to other countries, providing the institutions with data for their publications, obtaining information from these institutions and circulating it among interested parties in Israel, etc. Israel's active involvement in international financial institutions, via the Bank of Israel, helps to strengthen relations with economic policymakers abroad and reinforce ties between the Israeli economy and other economies.
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As a member of the IMF, Israel is visited once a year by a group of IMF economists who compose a comprehensive report on the domestic economy. The report is discussed by the Fund's Executive Board.
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As a developed country with a relatively high per-capita income, Israel is not eligible for credit from either the World Bank or the regional banks established to further the development of specific regions (BID and EBRD). Israel's membership in international development institutions, however, entitles Israeli firms to bid on projects financed by these institutions. One of the spheres in which Israel has much potential for participation in international projects is the export of knowledge and technology. The Bank of Israel has active funds for financing the work of Israeli consultants via the International Finance Corp., a member of the World Bank Group.
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In 1997, Israel joined the World Bank International Development Association (IDA), which grants credit on easy terms to about eighty of the poorest emerging countries. By so doing, it gained entry for Israeli firms into a market for tenders worth some $ 6 billion a year.
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The purview of the Information and International Relations Division also includes responsibility for the Bank of Israel Visitors Center, the Internet Unit, publishing, and the Bank's library.
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