Bank of Israel soundness indicators conform to int’l standards

Israel’s risk premium on international markets is now 0.22%.

For the first time, the Bank of Israel today published regular indicators of financial stability, some of which are also published on the website of the International Monetary Fund (IMF). This is part of an international project in which some 60 countries are participating, to promote the preparation and publication of comparable data on levels of stability in these countries' financial systems.

The Bank of Israel says that the probability of an extraordinary depreciation is now 2%, compared with 17.2% during the second Lebanon war last summer. Israel’s risk premium on international markets (CDS spread) was 0.22% at the end of 2006, compared with 0.31% at the end of 2005 and 1.9% in 2002.

The Bank of Israel says, “Publishing these indicators is an important step in improving awareness and transparency of financial stability maintenance, that is, of ensuring the orderly functioning of the financial system and the prevention of financial crises. Maintaining financial stability has become a central and distinct target of the authorities in many countries in recent years, and in Israel it is listed as one of the objectives of the central bank in the proposed new Bank of Israel law. International organizations, among them the IMF, and central banks of developed countries, are leading the research and analysis in the field of financial stability, promoting its awareness, as well as data transparency.”

From today, the Bank of Israel will regularly publish the following figures, among others: overall soundness of the financial system; indicators that the Bank of Israel uses to analyze financial soundness, which hitherto were only published in its annual report; comprehensive data on credit in the economy, including bank and non-bank credit.

Published by Globes [online], Israel business news - www.globes.co.il - on March 4, 2007

© Copyright of Globes Publisher Itonut (1983) Ltd. 2007

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