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Bank of Israel: Wikis

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Bank of Israel
בנק ישראל (Hebrew)
Bank of Israel logo
Bank of Israel logo
Headquarters Jerusalem, Israel
Central Bank of Israel
Currency New Israeli sheqel
ISO 4217 Code ILS
Base borrowing rate 0.75%
Base deposit rate 2.00%
Website www.bankisrael.gov.il
Bank of Israel in Jerusalem

The Bank of Israel (Hebrew: בנק ישראלArabic: بنك إسرائيل‎) is the central bank of Israel. It is located in Jerusalem, with a branch office in Tel Aviv. The current governor is Stanley Fischer.

Contents

History

At independence in 1948, the power of note issuance was vested with the Anglo-Palestine Bank, which was refounded as Bank Leumi in 1950. Monetary policy and banking supervision remained controlled by the Ministry of Finance.

The Bank of Israel was founded on August 24, 1954, when the Knesset passed the Bank of Israel Act, which ceded the currency issuing and regulatory functions of the Ministry of Finance to the newly formed Bank. Control over foreign currency exchange was not given to the bank until 1978. The Bank was made completely independent in1985 and since 1992, the Bank manages its monetary policy so as to meet the inflation target set by the Israeli government - which is today a range of between 1 and 3 percent per annum, considered as price stability. Additionally, the Bank manages the Foreign Exchange Reserves.

Governors of the Bank

Decision making

The Bank of Israel is rather unusual when compared to other financial institutions in that the Governor alone decides whether to change rates or keep them on hold, rather than being voted upon by board members. Prior to this decision, discussions are held at two levels - first in a broad and then narrow forum.

The broad forum sees the Governor, Deputy Governor, departmental directors and departmental economists come together, and the economists present current economic and financial conditions and data.

The narrow forum consists only of the Governor, Deputy Governor and the departmental directors, and is far more discussion oriented. The directors present their opinions and recommendations, which the Governor questions and weighs before reaching his decision.

See also

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