Israel's Financial Stability Committee, which was set up in 2018 to "support stability and orderly activity in the financial system" has been convened for a rare meeting following market volatility this week and the depreciation of the shekel over recent weeks. The role of the committee is to support stability by coordinating between the various financial supervisory authorities including the Bank of Israel, Supervisor of Banks, Ministry of Finance, and Israel Securities Authority.
Members of the Financial Stability Committee include the Governor of the Bank of Israel, Supervisor of Banks, and Head of Payment Systems, Ministry of Finance director general and accountant general and the chairman of the Israel Securities Authority.
It can be assumed that the emergency meeting focused on the weakening of the shekel, and warnings by economists and the international ratings agencies that the government's judicial reforms could adversely affect Israel's economy. The meeting demonstrates that Israel's supervisory authorities have gone on to high alert about the developments.
The Financial Stability Committee has the authority to alert the supervisory authorities when it identifies an actual systemic risk and to recommend measures to be taken. The committee was established as part of the conclusions from the 2008 crisis with the recognition that "it is not enough to ensure the stability of a particular financial institution by itself or of each component of the financial system separately, and that an integrative view of the entire financial system is required, which includes an effort to identify risks that develop in it over time and the risks of contagion across it of the system, and respond to them ahead of time. For this, a high level of coordination and cooperation is required between all the authorities that play an essential role in maintaining financial stability."
Published by Globes, Israel business news - en.globes.co.il - on February 23, 2023.
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