Latest news with #BankOfIsrael
Asharq Al-Awsat
a day ago
- Business
- Asharq Al-Awsat
Israeli Finance Minister Says Banks Should Not Obey EU Sanctions on Settlers
Israel's Finance Minister Bezalel Smotrich on Thursday condemned the country's banks that have refused to provide services to Israeli settlers sanctioned by the European Union and warned they may have to pay compensation to them. The EU last year imposed sanctions on five Israeli settlers for violence against Palestinians and Smotrich said there were reports of sanctions being considered against other settlers. But in a letter to the banking supervisor, he said Israeli banks should not follow a "zero risk" policy since it leads to the abandonment of Israeli clients "under the guise of compliance with foreign sanctions." In a statement quoting his letter to the regulator, Smotrich called on banks to use their legal, economic, and international strength to fight "unjust sanctions", Reuters reported. "The banks' enormous profits enable them to take measured risks on behalf of their clients — especially when it comes to a national moral injustice," Smotrich, who leads the far-right Religious Zionism party, said. Should banks continue to comply with sanctions and harm clients, Smotrich said he intended to promote immediate legislation that would require banks to pay substantial compensation to affected customers. He also intends to require the Bank of Israel itself to offer banking services to citizens targeted by sanctions. Responding to the letter, the Bank of Israel said that while banks must comply with international sanctions to avoid an array of risks, a draft directive it published on Thursday aimed to ensure appropriate banking services were available for the affected customers. "Circumventing foreign sanctions regimes through the Israeli banking system exposes banking corporations to multiple risks, including compliance risks, anti-money laundering and counter-terror financing risks, legal risks, and reputational risks," the central bank said. But it said it has taken steps to comply with sanctions "without banks resorting to blanket refusals to serve such customers." While the sanctions in question concern Israeli settlers, the EU is reviewing its broad pact governing its political and economic ties with Israel in the face of mounting international pressure on Israel amid complaints about the lack of humanitarian aid reaching Gaza in the wake of the war triggered by Hamas' Oct. 7, 2023 attack.
Yahoo
6 days ago
- Business
- Yahoo
Stanley Fischer, former Bank of Israel governor, passes away at 81
Fischer was praised for his transformative impact on Israel's economy and global monetary policy, especially during the global financial crisis of 2008. Stanley Fischer, former Governor of the Bank of Israel, passed away on Saturday at age 81. He held dual Israeli and American citizenship. Fischer served as Governor of the Bank of Israel from 2005 to 2013, and also served as Vice Chair of theFederal Reserve from 2014 to 2017, under the Obama administration. The Bank of Israel eulogized Fischer, writing, "Prof. Fischer made a decisive contributor to Israel's economy - both in his role as the IMF's representative to Israel in the 1980s, when he played a significant part in formulating the 1985 economic stabilization program, and during his tenure as Governor of the Bank, when he led a responsible economic policy during a challenging period that included the global financial crisis of 2008." Current Governor Prof Amir Yaron stated, 'The people of the Bank of Israel, past and present, and I bow our heads today in memory of Prof. Fischer, whose contribution to the Bank of Israel and the advancement of Israel's economy was decisive. We share in the family's deep sorrow. May his memory be a blessing.' Prof. Zvi Eckstein, head of the Aaron Institute for Economic Policy at Reichman University and former Deputy Governor of the Bank of Israel, commented on Fischer's passing, calling him a "visionary." 'Stanley Fischer was one of the greatest economists of our generation: a visionary, a guiding teacher, and an exemplary figure in public service. I had the privilege of working alongside him for about five years at the Bank of Israel." "I saw firsthand his tremendous contribution to shaping Israel's economy and to the historic legislation that enshrined the independence of the Bank of Israel. Beyond that, he was a brilliant scholar whose understanding of the dynamics of monetary policy and its impact through long-term contracts transformed economic thinking worldwide. May his memory be blessed, and may his contribution remain engraved in our hearts and our professional thinking," Eckstein wrote.
Zawya
27-05-2025
- Business
- Zawya
Bank of Israel holds rates but worried by possible inflation acceleration
JERUSALEM: The Bank of Israel left short-term interest rates unchanged for an 11th straight meeting on Monday, saying high inflation remains the chief concern while economic activity continues to recover moderately despite the war in Gaza. The central bank kept its benchmark rate at 4.50%. "In view of the continuing war, the Monetary Committee's policy is focusing on stabilizing the markets and reducing uncertainty, alongside price stability and supporting economic activity," it said. It added the rates path would be based on "the convergence of inflation to its target, continued stability in the financial markets, economic activity, and fiscal policy". With taxes and electricity and water prices rising at the start of this year and airfares increasing last month as foreign airlines cancel flights to Tel Aviv, the annual inflation rate gained to 3.6% in April - above expectations of 3.1% - from 3.3% in March and remained above the government's 1%-3% annual target. "In the Committee's assessment, there are several risks for a possible acceleration of inflation or for it not converging to the target range: geopolitical developments and their impact on economic activity, supply constraints, worsening global terms of trade, and volatility of the shekel," the central bank said. After the decision, Israel's shekel was 1.1% stronger versus the dollar and is up 2.1% this month. The Bank of Israel reduced the rate by 25 basis points in January 2024 after inflation eased and economic growth slowed amid the Gaza war, but has kept policy steady since and said it was in no rush to ease again while inflation remained above target. Based on bond yields, financial markets still expect inflation to ease to 1.8% in the coming year, according to Bank of Israel data. They also expect two rate cuts later in 2025 as projected by the central bank's own economists. In keeping rates steady, the Bank of Israel also cited economic activity rebounding moderately and a tight labour market, which has started to moderate. It mentioned the risk premium - as measured by the 5-year credit default swap price and by the spreads on dollar-denominated government bonds - had declined but remains above prewar levels. The economy grew by an annualised 3.4% in the first quarter after a 1% expansion for all of 2024 due to the war. All 14 analysts polled by Reuters had expected no rate move on Monday.
Bloomberg
26-05-2025
- Business
- Bloomberg
Israel Holds Rates as Inflation Spikes, Gaza War Escalates
Israel's central bank kept interest rates on hold for the 11th time in a row, maintaining a wait-and-see stance amid increased military operations in Gaza and an uptick in inflation. The Bank of Israel maintained its base rate at 4.5%, it announced on Monday. The decision was in line with the expectations of all 12 analysts polled in a Bloomberg survey.
Reuters
26-05-2025
- Business
- Reuters
Bank of Israel keeps rates on hold after April inflation rise
JERUSALEM, May 26 (Reuters) - The Bank of Israel left short-term interest rates unchanged for an 11th straight meeting on Monday after a surprising spike in April inflation, and as economic uncertainty persists due to the conflict between Israel and Palestinian Islamist group Hamas in Gaza. The central bank left its benchmark rate (ILINR=ECI), opens new tab at 4.50%. It reduced the rate by 25 basis points in January 2024 after inflation eased and economic growth slowed amid the Gaza war, but has kept policy steady since and said it is in no rush to ease again while inflation remains above target. All 14 analysts polled by Reuters had expected no rate move on Monday. With taxes and electricity and water prices rising at the start of this year and airfares increasing last month as foreign airlines cancel flights to Tel Aviv, the annual inflation rate (ILCPIY=ECI), opens new tab gained to 3.6% in April - above expectations of 3.1% - from 3.6% in March and remained above the government's 1-3% annual target. The economy grew by an annualised 3.4% in the first quarter after a 1% expansion for all of 2024 due to the war.
