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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.
More on Banks for Foreign Residents...
The number of
Israeli commercial banks fell 37% over ten years to 21 in 2003,
according to the Banking Supervision Department yearbook,
published yesterday. Israel had 38 banking corporations in 2003,
including 21 commercial banks, foreign banks, business
development banks, mortgage banks, financial institutions and
joint services companies.
The number of bank branches also
declined, although only by 11%, from 1,083 in 1994 to 960 in
2003. The central and Tel Aviv areas had the highest
concentration of bank branches, 338 and 170 branches,
respectively. There are 245 bank branches in the north,
including 58 in Haifa. There are also 205 bank branches in
Jerusalem area and in the south, including 101 in the city of
Jerusalem itself.
The number of bank employees has
been almost unchanged, declining from 33,400 in 1994 to 32,500
in 2003.
The yearbook also states that
Israeli banks had 118 overseas branches in 2003, compared with
94 in 1999. The increase was entirely due to an increase in the
number of subsidiary offices, from 21 in 1999 to 55 in 2003.
The aggregate financing profit,
after deducting allowance of doubtful debts, of these overseas
branches totaled $463 million in 2003. Their aggregate financing
profit rose from $412 million in 1999 to $473 million in 2000
and $493 million in 2001, before falling to $475 million in
2002. The decline continued in 2003
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