Bank of Israel
Located in Kiryat HaMemshala in Jerusalem, with a branch office in Tel Aviv, the Bank of Israel is the central bank of Israel. Dr. Karnit Flug was appointed Governor of the bank by the President of Israel on November 13, 2013. She is the Bank of Israel's first female Governor.
The main objectives of the bank are to maintain price stability, to support other objectives of the Government's economic policy, especially growth, employment, and reducing social gaps, and supporting the stability of the financial system.
When Israel was granted independence in 1948, the power of note issuance was vested with the Anglo-Palestine Bank, which was refounded as Bank Leumi in 1950. Monetary policy and banking supervision remained controlled by the Ministry of Finance.
The Bank of Israel was founded on August 24, 1954, when the Knesset passed the Bank of Israel Act, which ceded the currency issuing and regulatory functions of the Ministry of Finance to the newly formed bank. Control over foreign currency exchange was given to the bank in 1978. The bank was made completely independent in 1985.
Since 1992, the bank manages its monetary policy so as to meet the inflation target set by the Israeli government. Additionally, the bank manages the Foreign Exchange Reserves. In 2010, the Bank of Israel was ranked first among central banks for its efficient functioning.
In March 2010, the Knesset approved a new Bank of Israel Law which took effect on June 1, 2010. The new law defines the goals of the bank and gives the bank independence in determining its policy tools and the way of implementing them. The law changes the framework in which major decisions are made in the bank. Similar to the decision making procedures of other financial institutions, decisions regarding the rate of interest and monetary policy in general are to be made by a Monetary Committee, while the managerial decisions are to be approved by an Administrative Council.
Bank website: www.boi.org.il