Reorganization in the Bank of Israel: three new divisions

29.6.2006

Reorganization in the Bank of Israel: three new divisions

Over the last year, the management of the Bank of Israel has been discussing a comprehensive structural reorganization of the Bank. The first stage of this project has now been completed, and it includes defining three essential core divisions in the Bank. The Bank’s Director General, Yaakov Danon, says that the purpose of the reorganization is to adapt the Bank to the changes in the global and domestic economy and to make it an efficient, modern, advanced central bank, with its staff assigned to the jobs most appropriate to their qualifications and skills. Part of the change involves the creation of three core divisions, under which the various departments will operate. Other divisions will function alongside the three core divisions (see below).

The core divisions

The Market Activity Division

This division will deal with the implementation of the Bank of Israel’s policy in the domestic markets, the management of the foreign exchange reserves, gathering information, assessing the economy, analyzing trade and activity in Israel’s financial markets and in the international markets, and economic developments abroad. This division will be responsible to the Deputy Governor. Barry Topf has been appointed as head of the division, and together with the consulting company hired by the Bank will lead the planning of the detailed structure of the division.

The Research Division

This division will carry out research in the real, monetary and financial fields, as well as making monetary assessments, and will be responsible for writing the Bank of Israel Annual Reports and the Inflation Reports. Dr Karnit Flug has been appointed as head of the Research Division, and together with the consulting company hired by the Bank will lead the planning of the detailed structure of the division. The division will be responsible, on professional matters, to the Governor.

The division will consist of two departments: one will deal with monetary assessments (including models), financial analysis (including financial stability), and research in the monetary and capital market areas. Dr Akiva Offenbacher will head this department, in his personal capacity as a member of the Bank’s management.

The second department will deal with macroeconomic issues, the principal industries, fiscal policy, the labor market, the area of welfare, and the balance of payments. It will engage in both research and the formulation of policy proposals, and in day-to-day activity deriving from the Governor’s role as the government’s economic advisor. Dr Michel Strawczynski has been appointed to head this department.

It has also been decided to set up a committee headed by the Governor, with the Deputy Governor and the head of the Research Division as members, to determine a program of research for the Bank and to monitor its progress.

The Statistical Data Management Division

A division will be established to handle the statistical information in the Bank, which will gather the initial raw data at the individual and aggregate level, statistical series and relatively simple indices.

The division will be responsible on the one hand for receiving economic data derived from external sources (“suppliers of information”), and on the other hand for disseminating the relevant information to the “information customers” within and outside the Bank. This division will be responsible to the Deputy Governor.

A committee headed by the Director General of the Bank, with members from the consulting company is, together with the Deputy Governor, engaged in formulating the program for the establishment and organization of this division.

Other decisions

With regard to the Human Resources and Administration, Information Technology, Banking Supervision, and Currency Departments, the detailed planning process has started and is at various stages, and likewise regarding the Comptroller’s Office and Payments, for which the process is starting next week. A detailed press release describing the changes will be issued in due course.