The Bank of Israel was founded by David Horowitz on August 24, 1954. This bank is the center for all banks located in Israel. The headquarters of the bank is located in Jerusalem, precisely in the Kiryat HaMeshala. While the branch office of this bank is in the Tel Aviv area.
Bank of Israel is commonly abbreviated as BOI and this bank is certainly known by all Israelis. The building that became the bank’s headquarters stood and towered magnificently and was inaugurated in 1981.
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The design of the building can be said to almost resemble an inverted pyramid. Therefore, everyone who sees it must feel interested in the architectural beauty of bank buildings. Moreover, the bank institution also has a considerable role, especially in the country.
History of The Bank of Israel
The Bank of Israel was established at the time the Knesset endorsed the bank which gave up the function of issuing currency. Then in 2010, the presence of this bank was increasingly more evident with its position which ranked first among central banks.
The bank is also considered an efficient bank. Then in 2010 there was a process of drafting the new bank and came into force on June 1, 2010. A new law then led the Bank of Israel to carry out the entire program with certain procedures that became decisions on the part of the government.
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Vision and Purpose
Essentially the vision and objective of the Bank of Israel are to defend against the price stability of the Israeli financial system. In addition, this bank also contributes other objectives that become economic policy on the part of the government.
This is certainly related to the growth in Israel, the absorption of labor, and the reduction of social inequalities. So as a central bank, of course, this bank always strives to experience development and progress. What this bank institution wants to achieve is certainly related to achieving Israel’s prosperity and the well-being of all its citizens.
As a bank that is the center of the country’s financial management activities, the Bank of Israel certainly restricts its consumers. But that does not mean that consumers cannot know this bank more deeply because of all the information you can now get. Actually to be able to get the right information about this bank can be done by accessing the website of this bank itself. Then everything you want to know can be obtained.
However, given its role as a central bank in Israel, surely this bank cannot be a financial institution that has many customers. Instead, the Bank of Israel becomes a financial institution or official body that can conduct financial measures against all other financial institutions in Israel. In this case, this bank becomes an objective and neutral institution.
Bank of Israel Roles in Monetary Policy
The role of this bank that becomes a protector for the value of the local currency while maintaining price stability certainly makes it involved in terms of monetary policy.
Moreover, the Bank of Israel is also strived to always be able to support the government’s economic policies. Of course, this bank also takes part in the government’s efforts to prevent high inflation. So it is not surprising that some efforts will always be made by this bank to carry out its role as a central bank under the auspices of the Minister of Finance. The bank provides short-term interest rates as has been set by the Monetary Committee.
In implementing the monetary policy that has been established, the Bank of Israel has various monetary tools. The entire application of this tool is certainly accompanied by involving several markets that are limited in nature. One of the things done by this bank institution to achieve its goal is to conduct a deposit auction to reach the interest rate following what has been set by the government.
In addition, the Bank of Israel also opened a monetary loan window for various banking companies. Another tool used is the central bank bill in the form of short-term securities that are issued to affect interest rates, especially in the money market. This bank also entered into a buyback agreement known as open market operations.
Payment systems are essentially important in the economic infrastructure as well as modern economic finance. Moreover, the Bank of Israel also has functions that tend to contribute to financial development and stability efficiently. So this bank must always be able to run a reliable and efficient payment system.
In addition, the bank must also be able to reduce all kinds of risks that may occur in payment or settlement activities. Various means of payment can be used such as checks and cash as well as payments through the internet and others.
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Bank of Israel whose management is under the management of the Israel Financial Ministry become one of the banks that are certainly known in the world. Its function of helping the Israeli government to carry out financial management in building Israel is needed. Therefore, the existence of this one bank institution is expected to always be able to provide the best service for the development of the Israel community.