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The Bank of Israel operates by virtue of the Bank of Israel Law, 5714-1954, which was passed by the Knesset on 24 August 1954 and which went into effect on 1 December in that year.
The Law replaced the Bank Notes Ordinance, 1948, that was enacted after the establishment of the State and that regulated the authority to issue banknotes in a charter between the government and the Anglo-Palestine Bank, which later became Bank Leumi Le-Israel. The Anglo-Palestine Bank was a subsidiary of the Jewish Colonial Trust founded by Dr. Theodor Herzl.
The Bank of Israel started operating on 1 December 1954.
The Bank of Israel, like the central banks of many other advanced countries, acts as an independent entity that fulfills essential functions in the field of economic policy. The following are among its main functions:
- Directing monetary policy
- Promoting price stability and financial stability in the economy, in order to create the conditions for sustainable growth
- Promoting economic reforms
- Economic and social- research
- Banking supervision
- Managing the country's foreign exchange reserves
- Monitoring and analyzing activity in the capital and foreign-currency markets; Acting as sole banker to the government and the banks
- Acting as the government's fiscal agent; advising the government on its capital market activities and carrying out those activities, e.g., selling and redeeming government bonds
- Issuing Israel's coins and banknotes
- Representing Israel in international financial institutions such as the International Monetary Fund (IMF), the World Bank; the Inter-American Development Bank (IDB); the European Bank for Reconstruction and Development (EBRD), and the Bank of International Settlement (BIS)
- The Governor of the Bank of Israel acts as economic advisor to the government.
The Bank is located in Kiryat Ben-Gurion in Jerusalem, close to the Knesset, the Supreme Court, the Prime Minister's Office and other government Ministries.
Bank of Israel
