The budget is approximately 8 percent lower than the budget for 2018.


The Bank of Israel today is publishing the main provisions of its work plan and administrative activity budget for 2019. The Bank of Israel’s Supervisory Council[1] discussed the Bank's annual work plan, approved the Bank's annual budget for administrative activity, and submitted the budget to the Knesset Finance Committee, as required by the Bank of Israel Law, 5770–2010.

Within the framework of the multiyear plan formulated at the end of 2016, the Bank’s long-term strategic targets for 2017–19 were redefined, and a three-year operational plan was prepared, which takes into account the changes and challenges expected in the Israeli and global economies during this period. The multidimensional plan has considerable importance in setting priorities, prioritizing projects and tasks, and in allocating the human resources and budget required for implementing the work plan. The work plan for 2019 is derived from the three-year planning. During the course of the year the Bank will deal with new multiyear planning for the coming years.

Following are the long-term strategic targets that the Bank’s management set for the Bank’s work for the benefit of the public and the economy for the coming years:


1.      Maintaining price stability

The challenge inherent in managing monetary policy in a low interest rate and low inflation environment in Israel and worldwide requires the Bank of Israel to make informed use of policy tools that are appropriate to this environment, while taking into account the risks inherent in a policy of low interest rates for a considerable time.


With that, in recent years the global economy has gradually been recovering from the effects of the crisis, and the expectation that the recovery will continue requires the Bank to prepare for continued normalization in monetary policy worldwide, which has already been reflected in interest rate increases in the US and in other economies, in a gradual cessation of the quantitative easing process, and more. The Bank will also need to examine the financial and real ramifications of those changes.


2.      Strengthening the financial system’s stability and resilience to crises

An economy’s economic and financial resilience is reflected in, among other things, its ability to deal with crises and to get through them in an optimal manner, as Israel’s economy dealt with the global financial crisis. In order to bolster the financial system’s preparedness to deal with various crisis events, the Bank of Israel will act through various routes—formulating work procedures for the Financial Stability Committee pursuant to the Knesset’s decision in November 2018 to establish the Committee, promoting risk-based prudential supervision of the banking system’s stability, advancing oversight and regulation of payment and settlement systems and of payment services, and advancing the Bank’s preparedness for managing financial crises.


3.      Promoting effective and reliable systems and means of payment

Among its other functions, the Bank of Israel is responsible for the orderly supply of cash to the economy, and ensuring that there are payment systems such as the Zahav (RTGS) system, the Shva and Masav (automated clearing house) systems, and means of payment that serve as cash substitutes, such as checks, credit and debit instructions, various payment cards, and other advanced means of payment. As part of this, the Bank of Israel works to ensure the effectiveness and reliability of the various means of payment in the economy.


In the coming years, the Bank of Israel will deal with increasing the use of advanced electronic systems and means of payment and in advancing the establishment of infrastructure for fast and secure clearing of advanced retail payments. The Bank will continue to examine the possible ramifications of issuing a digital currency by the central bank, a subject that several central banks around the world have begun to examine.


The Bank of Israel is working to complete the exchange of the banknote series in circulation: after having completed the launch of the new series, the Bank continues to print and distribute the new banknotes, to complete the absorbing of the old banknotes, and continues to work to enhance the public’s awareness of security features and prevention of counterfeiting, in order to increase the public’s confidence in the currency.


In addition, the Bank of Israel is prepared to accompany the establishment of the government company for correspondence ties vis-à-vis the Palestinian Authority and for the oversight required.


4.      Increasing competition and efficiency in the financial system

Financial system competition is of great value to the public and the economy, as it acts to reduce the prices of services, to improve their quality, and to expand their accessibility to the general public. Technological innovations allow the further progress of banking system competition, among other reasons as they make it easier for nonbank entities to enter various sectors of the credit market—direct provision of credit, establishment of communication systems between borrowers and lenders, and the setting up of systems that make it possible to compare prices, to analyze customers’ needs, etc.


As such, the Bank of Israel is working to launch the national credit-data sharing system, in accordance with the provisions of law. With the completion of the regulation of the system, the Bank of Israel will begin consumer awareness efforts, in order to assist the public to derive maximum benefit from the system. The system will help to bolster competition in the retail credit market, will expand access to credit, and will make it possible to expand the information available to credit providers in assessing a customer’s level of credit risk. It will also serve as a nonidentifying database for the Bank of Israel to use in carrying out its functions, including for macroeconomic research and development of effective policy tools.


In addition, the Bank will work to expand access to payment and settlement systems to entities that are not banking corporations, accompany initiatives to establish a new bank, promote the accessibility of the payment card infrastructure and improve its efficiency, to examine instituting deposit insurance (in collaboration with government functions), or alternatives that will encourage the entry of new entities to Israel and to promote technology and innovation in banking and finance.


The Bank of Israel is leading two structural processes to enhance competition: (1) Open banking, a project in which banks will disclose information on customers, who granted their consent to do so, to third parties (fintech entities). (2) Switching between banks with just a “click”, which will enable customers to change banks easily, rapidly, and with no monetary cost, as well as to improve their terms of engagement with the bank.


5.      Protecting customers of the banking system, credit card companies, and the credit data system

The Bank of Israel is responsible for protecting the rights of banking system customers and for ensuring fairness in the banks’ relationships with their customers. The Bank’s activities in this area contribute to strengthening the public’s confidence in the banking system and in the Bank of Israel. In the coming years, the Bank will act to strengthen its system of public enquiries services vis-à-vis banking system and credit card company customers, to increase the financial awareness with regard to banking among the public, with the goal of assisting the public to manage its banking activity in an independent and informed manner, and to promote operative initiatives that will focus on various target groups including households, small businesses, youth, senior citizens, and other specific populations.


In addition, the Bank of Israel is establishing a public enquiries system for customers of the national credit data sharing system, including a function to clarify public enquiries, a call center, and website. These all will enable customers to exercise their rights related to sharing the data in the system, including: submitting a request to look into complaints, to receive reports on the credit data existing about them in the system, to issue instructions relating to the entities to whom their credit data are not to be provided, and even to provide an instruction not to include them in the credit data system.


6.      Supporting sustainable and inclusive growth

Expected demographic developments in Israel, and with them the exhaustion of processes that accelerated growth in previous decades, contribute to the slowing in economic growth from the beginning of the current decade, and show that growth in GDP per capita will probably moderate markedly in the coming decades. In order to assist in designing a policy path and processes that will increase the economy’s growth potential, and alongside that will reduce inequality and poverty, the Bank of Israel will focus its research on areas that in its assessment contribute to the progress of such processes. Accordingly, the Bank will act to develop recommendations for economic policy that will contribute to the growth of Israel’s economy through increasing productivity, developing physical infrastructures and human capital, and increasing the efficiency of using them. Likewise, the Bank will promote the carrying out of research in welfare and employment, with the goal of creating infrastructure for recommendations on policy measures that will increase income and employment for all segments of the population.


7.      Promoting economic research and statistical information

A central bank’s activity and decision-making rely on extensive research and statistical data. The Bank therefore works to reduce the gaps in research and statistical data and develops new approaches to collecting and processing data. The Bank acts to integrate the areas of research, knowledge, and tools that expand the range of possible recommendations with regard to policy; to develop knowledge and expertise in advanced statistical methods and tools; and to implement these abilities in order to extract data, formulate new insights, and to forecast developments in Israel’s economy and financial system. In addition, the Bank strives to expand the public’s and economic researchers’ access to statistical data, to expand the statistical data in new areas in accordance with the economy’s developments and to promote economic research on areas of Israel’s economy at international standards.


8.      Managing the foreign exchange reserves

The Bank of Israel holds and manages the State’s foreign exchange reserves in accordance with investment policy guidelines outlined by the Monetary Committee. The policy is based on several principles—maintaining the purchasing power of the reserves, managing the reserves with a high degree of liquidity, and achieving an adequate rate of return on the reserves portfolio.


The asset allocation of the reserves portfolio is set so that it has an adequate expected return given the assessments of the conditions expected in the financial markets, and taking into account the limitations and risk profile included in the guidelines. In the coming years, the Bank of Israel will continue to examine the expansion of the range of markets and assets in which the foreign exchange reserves are invested.


9.      Implementation of the Citizens of Israel Fund Law

In accordance with the Citizens of Israel Fund Law, 5774-2014, a fund was established for managing the revenues that will be received by the State from the levy on profits from natural resources. The Citizens of Israel Fund (“the Fund”) is intended to administer the revenues with a long-term economic perspective of achieving a return that will make the continued existence of the fund possible for many generations. The Law established that the fund’s assets are to be transferred to management by a dedicated department at the Bank of Israel when it accumulates NIS 1 billion, which is estimated to occur in 2020.


Accordingly, by the end of 2019 the fund’s institutions—the Council and the Investment Committee—are expected to be established, as required by the Law. In addition, the Bank’s preparations required for the investment and management of the assets are expected to be completed, in collaboration with the Fund’s institutions.


In addition to these multiyear targets for the good of the Israeli public and economy, the Bank of Israel set several targets to ensure it is an advanced, dynamic, and effective central bank that merits the confidence of the public.


·         Bolstering the organizational preparedness for achieving the Bank’s targets

The Bank of Israel acts to bolster its operational preparedness and organizational effectiveness in order to increase its efficiency and to lead to an optimal allocation of resources over time. Organizational preparedness includes integrating innovative technologies at the Bank, strengthening functional continuity and protecting the Bank of Israel’s cyber dimension in crisis situations, upgrading the Bank’s physical and technological infrastructures and bringing them in line with the changing needs, the enhancement of risk management culture and procedures, and institutionalizing the function of Compliance Officer at the Bank.


·         Development of human capital

In order to maintain the high level of professionalism that has characterized the Bank of Israel over the years, the Bank will emphasize processes that ensure the hiring and retaining of a quality workforce with a range of talents, and the formulation and implementation of new tools to cultivate human capital.


·         Maintaining and strengthening the public’s confidence in the Bank of Israel

The public’s confidence is one the main assets of a central bank. This confidence is based to a large extent on how the media presents and explains the organization, and its reputation among the public. That reputation is based on the organization’s professionalism, credibility and integrity, and in these areas the Bank of Israel is considered a leader in the public sector. Maintaining and enhancing the public’s trust in the Bank of Israel improve the Bank’s ability to carry out its functions and achieve its objectives, for the good of the economy and the public. Accordingly, the Bank will take care in the coming years to expand and increase the effectiveness of the publicity of the Bank of Israel’s policies and actions. In addition, the Bank will emphasize the dialogue and contact with the public.


·         Enhancing the management of information and knowledge at the Bank

The Bank of Israel’s high level of professionalism has been maintained over the years based on information, knowledge and experience that its employees accumulated over time. Therefore, the Bank will continue to invest efforts in developing tools, methodologies, systems and procedures that will allow the efficient retention and improvement of information and knowledge accumulated at the Bank. Accordingly, the Bank will continue to promote the establishment of an intra-organizational communication and information-sharing array, including an appropriate technological infrastructure, and will also promote an integrative infrastructure for the management, sharing, and accessibility of the Bank’s databases, for customers within the Bank and to the extent possible also for customers outside it, through the Bank of Israel’s Internet site.


In addition, in 2019 the Bank of Israel will complete the formulation of privacy protection policy at the Bank, as it collects, manages, and analyzes extensive personal information in order to fulfill its functions and achieve the objectives set for it in the Law. Likewise, the Bank will focus on implementation of policy in all that regards the launch and operation of the credit data system, in accordance with the strict requirements set by the Law.


·         Maintaining and tightening professional ties

In 2019, the Bank will continue to maintain productive and professional work ties with regulators in Israel, with an overall view of the good of the public and the economy. The Bank will also continue with its effort to improve the research ties with central banks and monetary and financial institutions abroad, and to maintain productive work ties with regulators worldwide, within the framework of agreements and membership in international organizations.


The Bank’s Budget


The Bank of Israel's budget relates to the Bank’s administrative activities necessary for performing its functions and achieving its targets.


In accordance with the Bank of Israel Law, the Bank of Israel's budget is divided into several areas of activity: 1) Management and Central Services (the expenditure budgets of the entities that deal with the management of the Bank and with the provision of services and support); 2) Performance of the Bank’s functions (the expenditure budgets of the core departments); 3) Representative office abroad; 4) Pensions; 5) Investments; 6) Income; 7) Reserve; 8) Currency issue; 9) Operation of the Citizens of Israel Fund for natural gas profits, and 10) Credit data sharing system.


The Bank of Israel’s overall budget for 2019 totals NIS 1,195 million. The budget is approximately 8 percent smaller than 2018, primarily due to two central projects that have a transitory effect on the budget: the budget for renovating the main building in Jerusalem, which is nearly fully completed and employees have been moving back in during the current period, and the budget for currency issue in view of the completion of the entry into circulation of the new banknote series and the switch to ongoing issuance of banknotes and coins in 2019,


Following are the main changes in the Bank of Israel’s budget for 2019:

Credit data sharing system: The Credit Data Law, 5776-2016, authorizes the Bank of Israel to establish and manage a credit data sharing system. In 2019, a budget of NIS 166 million was allocated to completing the establishment of the Register, which is expected to be launched this year, in accordance with the provisions of the Law.

Investments:  The Investments budget will be NIS 128 million. It decreased primarily in light of the pace of progress in two projects that were approved in previous years: the renovation of the main building in Jerusalem and the construction of a Technology and Emergency Center. In addition, several main investments are planned, mostly in the technology area.

Operational efficiency: The Bank’s budget for 2019 reflects increased efficiency in the Bank’s expenditures, by 18 percent, compared with the budget for the previous year and at least 5 percent of the forecast performance for 2018.

Budget for future years: The budget for permitted commitments for coming years is NIS 371 million, of which 41 percent is designated for future investment commitments by the Bank, mainly for the continued establishment of the Technology and Emergency Center the new Data Center.

The administrative activities budget does not include income and expenses stemming from the implementation of monetary tools, the provision of credit to banking corporations and to other financial institutions, activities related to managing liquidity in the economy, and foreign exchange reserves investments, etc. Such income and expenses are reflected in the Bank of Israel's financial statements and in the Investment of the Foreign Exchange Reserves report of the Bank.


Table 1: The Bank of Israel’s Budget for 2019

(financial data in NIS thousand)







Permitted commitments for coming years

Personnel ceiling

Original 2018 budget

Actual expenditure 2017


Bank of Israel


= = = = =


= = = = =


= = = = =


= = = = =


= = = = =


Management and Central Services







Performance of Bank’s functions







Representative office abroad



































Currency issue







Operation of the Citizens of Israel Fund for natural gas profits







Credit data sharing system







[1] The Supervisory Council, under the Bank of Israel Law, 5770-2010, is the entity charged with, among other responsibilities, supervising the orderly and efficient management of the Bank of Israel, discussing the Bank’s annual work plan, and approving the annual budget for administrative activity. The Supervisory Council consists mostly of members from among the public.