I am leaving the Bank of Israel after five years during which I had the privilege to serve as Governor of the Bank, two years as Deputy Governor, 10 years as Director of the Research Department, and altogether 30 years in which the Bank of Israel was my workplace and second home.


I am finishing the term as Governor with a deep sense of satisfaction, and great pride in the many accomplishments in all areas of the Bank’s activity:


The economy is in a good and stable state, due to no little extent to the monetary policy, and this is not a given: in a period where many economies went through a recession and a high level of unemployment, we benefited from solid growth, low unemployment, rising wages, price stability and a stable financial system. At the beginning of my term, the monetary policy provided quite a few headlines, after we reduced the interest rate to nearly zero, to a level never before seen in Israel, and for some time it even appeared that we would need to adopt unconventional tools.


In the continuation as well, when to an outside observer the policy may have appeared somewhat boring, it was essentially formulated, at each decision anew, through a deep discussion that could serve as a paradigm of decision making in many other areas. The policy was formulated so that it would support the economy—via price stability, growth, and employment. In the coming period the Monetary Committee will deal with the precise formulation of the beginning of the normalization process. In this regard I feel a bit like Moses—I almost got there, and hoped that I would be able to take the first step in the process, but I will have to watch the next stage of the Israeli economy’s monetary policy from the side.


Alongside the interest rate policy, we continued to moderate the forces for appreciation via foreign exchange purchases. With the increase in the foreign currency reserves, there was an increased need to rethink the manner of managing the reserves. We led a groundbreaking process, which received international recognition, as part of which we gradually broadened the types of assets and financial markets in which the reserves are invested.


We have made giant strides, together with partners, in creating the infrastructure for increasing competition in the banking system, by adjusting regulation, changing legislation, and promoting platforms and infrastructures for enhancing competition. To note some prime examples—we are establishing the credit data system that will go live in a few months (have I mentioned Moses already?), we launched the API “open banking” project, and we are energetically advancing the project of switching banks.


In recent months, the implementation of the recommendations of the Committee for Enhancing Competition in the Financial System is gathering momentum, and in particular, one of the credit card companies has already been sold.


The fine tuning we have managed to achieve in legislation due to the Committee’s recommendations was critical, and we found the proper balance between the need to promote competition and the requirement to maintain the system’s functioning and stability, which by their nature receive less weight in the political system.


There are those who think that our recommendations in the macroeconomic policy area were formulated on paper only—but they are wrong. By the nature of things, not all the recommendations always met with applause from the political sphere, and they were not always fully and completely implemented. However, in my assessment, they did contribute to the deficits not deviating from a reasonable level, and in particular when taxes were not reduced based on one-off revenues, which would have required either going back and raising taxes when it became clear that the reduction is not sustainable or cutting more public services, which are already relatively modest, that the government provides to the citizens. In the area of public services and quality of infrastructure, we highlighted the following challenges, through research, discussion with government entities, reports, and public addresses: the need to improve health-system infrastructures and to prepare for a decline in the number of doctors and the aging of the population, the need to improve teacher quality and provide teachers with incentives to work precisely in the weaker schools at the geographical and socioeconomic periphery, the fact that if we don’t provide the required skills to every citizen we will not be able to prepare our children for the labor market of tomorrow, and growing need to invest in public transportation. All these are the basis for ensuring inclusive and prolonged growth over time.


I first spoke about the need to formulate policy that will support inclusive and sustainable growth when I was appointed to the position at the President’s residence five years ago. Due to our intensive dealing with the issue, the understanding that the key to that is increased productivity trickled down to those responsible for policy. In some of the issues, there was real progress—for example, the government adopted our recommendation to increase the earned income tax credit (work grant)—and in some of them governmental work teams were established (in the areas of productivity, industry, reducing bureaucracy). However, there is still a long way to go in dealing with the main challenges in the three fundamentals of improving productivity—education, investment in infrastructure, and increased efficiency of regulation.


It is true that we did not succeed in convincing in all the areas. The common denominator of those issues that have not yet been advanced is that it is difficult to see immediate benefit from them, and thus they do not have a political return, despite their great importance for the long term and for entrenching the stability.


For example, we have not succeeded in convincing that the retirement age should be raised, despite the need being clear to all, and the law establishing the Financial Stability Committee has not yet been legislated despite the great importance of that law. This is particularly so when the financial system, the players in it, and the regulation of it are going through major changes and the need to monitor those changes, and handle the risks that are liable to crop up from various sides is screaming: (there is no lobby for this, people take for granted that the financial system is stable).


Here, too, I have a feeling a bit like that of Moses—we covered the whole ground in formulating the law, but I will have to observe its passing and the setting up of the Committee from the side.


Over the past years, we launched and gradually entered into circulation the new currency series. This is of course an issue that garners a lot of attention due to the cultural elements involved in it, but the actual production and supply of the banknotes requires a lot of professional work. In recent years, the Bank of Israel dealt with the security of the new banknotes through the integration of security features that are among the most advanced in the world, with the careful planning of the pace of entering the banknotes into circulation—and without noticing it, the old banknotes have already almost disappeared from our pockets and the Poets Series has replaced them.


Banknotes and coins are still with us, but the world of means of payment is advancing. We continued to remove barriers that held back the development of the payment system, and to plan and to think about the payment market of the future, about how it will best serve the economy and the citizens, and about the role of regulation.


And as for the Bank of Israel itself, the managing of the Bank from the perspective of human resources and the physical and technological infrastructures went through no less than a revolution in recent years. In the belief that the Bank of Israel’s most important resource is its human capital, that is, its employees and management, we advanced many processes, some of them innovative, in recruiting and managing the employees and upgrading their talents, and in aligning them with the challenges facing the Bank of Israel in the future.


We also dealt with the Bank’s buildings and infrastructures: we upgraded the work environment at the Bank’s buildings in Tel Aviv, opened a remarkable Visitors Center, which tells the historical and current story of the Bank of Israel, and the Jerusalem building’s renovation, that is just shy of completion, and about which I really feel just like Moses—I can view the renovated and upgraded building, but I will only be able enter it as a guest. I am sure that the Bank of Israel personnel that are here are looking forward to moving in the next few weeks into an upgraded, modern, and safe building, with a pleasant work environment, one that will support the Bank of Israel’s critical infrastructures for decades to come. Enjoy!


I merited heading an organization with wonderful people: employees and managers who are all committed to professional work at the highest level—and who serve the public with every bone in their body. All that we achieved was due to them, to you. Therefore, before concluding, I would like to say a heartfelt thank you to everyone who was a partner in what we did here over the past 5 years:


To members of the Bank’s management, who led, each in their area, the professional work of the excellent employees of this unique institution;


Special thanks to Hezi, whose professionalism, and out of deep commitment, fully dedicated himself to managing the bank in all aspects, and to advancing the complicated projects we took on ourselves—first and foremost the complex project of upgrading the building, and leading the establishment of the credit data system—a national project at a magnitude that the Bank of Israel had not previously known; as well as dealing with all aspects of labor relations at the Bank;


To Nadine, for her partnership in managing the monetary policy and maintaining the financial stability, alongside the responsibility for issues that are not necessarily spoken about too much but that are of tremendous importance, such as the economic relations with the Palestinian Authority, the preparations for establishing the sovereign wealth fund, as well as the important role you filled in designing the credit data system and more;


To Hedva Ber, who came into her role like a whirlwind, and energetically promotes the reforms that will change the face of banking; and to Dudu Zaken before her, for whom the short-term and long-term good of the banking consumer was a guiding light;


To Andrew Abir, who in his quiet way took care that the reserves we manage for the State of Israel would be managed professionally and carefully, but would also yield a return in a period in which the combination of conservative management and achieving an adequate return was particularly challenging;


To Michel Strawczynski, and before him to Nathan Sussman, who upgraded our research and analytical tools, pushed the professional knowledge in many areas so that it would be on equal footing with the most advanced central banks, and entrenched the Bank of Israel’s status as the leading economic research, analysis, and policy entity in Israel;


To Pnina Keren, who led a revolution in dealing with the Bank’s employees, in management, recruitment, and upgrading talents;


To Tida Shamir, our strict gatekeeper, and advisor in every issue, who challenged our thinking each day anew;


To Eyal Rozen, who works to upgrade the statistics systems and bring them to the highest professional level;


To Avner Ziv, who makes sure that in technology as well we are leaders in our field;


To Irit Mendelson, who is responsible for the operation of the most basic infrastructure in Israel’s financial system;


To Ilan Steiner, who at any given moment is taking care that every one of the 600 million banknotes in circulation is reliable and at a high standard;


To Shai Rosenstock, the internal auditor, who checks that we are all working as required and are attempting to strive for the best;


To Eyal Hadad, the chairperson of the Workers Committee, who knew how to lead the Committee toward pragmatic and responsible conduct, while creating a relationship of trust, and finding creative ways to overcome disagreements, for the good of the Bank and the employees;


To the first Supervisory Council, led by Dan Propper, which forged the foundations of the Council’s work, and to the current Supervisory Council, led by Prof. Shuki Shemer, that came in energetically and works to improve the management and conduct of the Bank out of the desire to enable the Bank to carry out its important function for the Israeli economy and public;


To past and present members of the Monetary Committee, who challenged the thinking on every aspect of the policy and took care that the discussions would be lively, and even when disagreements arose, and there were quite a few of those, it was quite clear that all the positions formulated were extremely pertinent, and reflected mainly different weights given by the different members to different considerations that were all for the public’s benefit.


And to the office staff that accompanied me efficiently and pleasantly:


To Eddy Azoulay, who was my chief of staff at the beginning, and returned to the position in the past few months out of a desire to help, to Dani Hahiashvili who filled the role for four years; both of them in their own way advised, assisted, and supported me in all my activities in and out of the Bank;


To Yoav Soffer, the spokesperson of the Bank, who not only took care to precisely convey our messages in all areas of the policy, but also knew, on more than one occasion, what I meant to say even better than me; to Ronit Cohen, my office manager, who managed the office efficiently, professionally, with dedication and charm, and took care, together with the other employees in the office, of every issue, large and small; to the students over the years, who helped make the content accessible to the public in a clear manner, in countless public appearances. And to Naor who brought me everywhere calmly and reliably;


And to all the Bank’s employees and managers for the professionalism, stateliness, dedication, integrity, and unending commitment to realizing the Bank of Israel’s vision of being an advanced central bank that contributes to the prosperity of Israel and the welfare of its citizens,


And two final thanks:

To Stanley Fischer, who came here for this evening, a giant, from whom I learned an incredible amount in the years we worked together, and who believed in me, and in my ability to fill the role, more than I believed in myself.

I want to end my remarks with thanks to my family: to my mother, Dorota, whom I neglected a bit in recent years; to my sister Anat for her good advice every Saturday morning; to my spouse, Shaul, and my children Maya and Michael, who if they had not served me as a support group for many years, despite their avoidance of public exposure, I would not have been able to dedicate these 5 years in such a total way, to fill the role from which I am stepping away now.

I want to thank everyone who had a part in organizing this meaningful evening.


Two more wishes for success:

To Nadine, who will fill the role of Governor of the Bank in the upcoming period until the completion of the appointment process and the entry into the position of the new Governor—good luck. It is not an easy stage—I know, I’ve been there.


And to the appointed Governor, Amir Yaron, I wish you great success in leading this special institution, and its employees, dedicated public servants, who work day in and day out to achieve the Bank’s vision, for the good of Israel’s economy and its citizens.​