Bank of Israel

The Bank of Israel, also known as the Israeli Central Bank, is the nation’s monetary authority responsible for formulating and implementing monetary policy aimed at maintaining price stability. It issues the Israeli new shekel, the country’s legal tender, and ensures the integrity and availability of cash and electronic payment systems. The bank supervises banking institutions, setting prudential standards and conducting oversight to promote a sound and resilient financial sector. It manages the country’s foreign exchange reserves, intervening in markets when necessary to support the shekel’s stability and to meet external obligations. As the government’s banker, it handles the state’s accounts, processes payments, and manages public debt issuance on behalf of the Treasury. The Bank of Israel also operates and oversees key payment and settlement systems, facilitating interbank transfers and ensuring the smooth functioning of the national payments infrastructure. Its activities extend to the provision of economic research and statistical data that inform policymakers, market participants, and the public. Through these functions, the institution serves the entire Israeli economy, influencing credit conditions, investment decisions, and overall financial stability.

The Bank of Israel is distinguished by its statutory independence, which allows it to pursue monetary objectives without direct political interference while remaining accountable to the Knesset and the public. It is a state‑owned entity, with its capital held by the Government of Israel, and its governor is appointed by the President upon recommendation of the Governor and approval of the Government. The bank’s regulatory role includes licensing banks, enforcing anti‑money‑laundering rules, and monitoring systemic risks that could threaten the financial system. Its notable competencies encompass advanced capabilities in reserve management, economic forecasting, and the operation of real‑time gross settlement systems that support high‑value transactions. The institution also maintains a commitment to transparency, regularly publishing monetary policy decisions, financial stability reports, and operational statistics. These attributes position the Bank of Israel as a central pillar of Israel’s financial architecture, tasked with safeguarding the credibility of the currency and the resilience of the banking sector.