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  • In recent years, the Banking Supervision Department has formulated several assistance programs for banking customers dealing with cash flow difficulties due to various crises that the Israeli economy has faced. These crises included the COVID-19 pandemic, the war that broke out on October 7, 2023, and Operations “Rising Lion” and “Roaring Lion” against Iran.
  • Throughout the crisis periods, the Banking Supervision department has closely monitored the data and developments, including indications from the field and ongoing discussions with the banking system. Adjustments and extensions were made to the programs as necessary, and the leniencies provided within the programs were expanded.
  • From an economy-wide standpoint, the programs served as an initial and rapid broad measure for households and businesses to regain stability and certainty, and provided a cash flow bridge until government assistance could be obtained or until they could recover from the financial state they were experiencing.
  • The programs were part of the synergy that was created thanks to the monetary policy measures and steps taken with the banking system. These included regulatory adjustments and leniencies that provide a response for households and businesses dealing with the emerging challenges, and that allow the banks to hold less equity in order to increase credit to the public and businesses, while ensuring proper risk management. These enabled the Bank of Israel to make sure that the supply of credit for getting through the crisis and to bridge over liquidity and cash flow difficulties was deployed through all sections of the economy at similar price levels, despite the increased risk environment.
  • As part of the use of the various programs, payments on more than one million loans were deferred. The deferrals were extended in accordance with the needs that arose from the field, and the high volume of use shows the programs’ effectiveness for households and small businesses.
  • The absolute majority (more than 90 percent) of people who deferred loans as part of the various programs resumed paying their debts in an orderly manner. At the same time, during the crises, there were no uncontrolled increases in loan loss provisions, while the growth of credit in the economy continued.  This prevented long-term damage to both borrowers and the banking system.