There are three main sectors to the Israeli banking system: the Central Bank, the Commercial Banks, and the Investment Banks. Israel\'s Central Bank is the Bank of Israel, which was established in 1954. It is responsible for managing monetary police, administering the currency system and directing the credit and banking system. It seeks to stabilize the value of the New Israeli Shekel within the country, by controlling inflation, and outside the country, by attempting to achieve a balance of payments. It also tries to maintain a high level of production, employment, national income, and capital investment in Israel by imposing reserve requirements on banks and varying the interest rates.

Bank of Israel also serves as the banker of the government, financial advisor to the government, manager of Israel\'s foreign currency reserves, controller of foreign currency, manager of government loans, and controller of banks.
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