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The Supervisory Council of the Bank of Israel approved the Bank's financial statements for 2011, in accordance with Section 75 of the Bank of Israel Law, 5770-2010. Prior to approval, the Supervisory Council appointed from among its members a financial statements committee, which examined the Bank's financial statements and recommended their approval. The financial statements committee was headed by Ytzhak Edelman, an accountant. The other members of the committee were Dr. Karnit Flug and Uri Galili.
The Bank of Israel's balance sheet at the end of 2012 was about NIS 303 billion, compared with NIS 308 billion at the end of 2011—a decline of about 1.6 percent. The major decrease on the assets side arose from a decrease in the Bank's foreign currency assets and in the balance of tradable securities in local currency. On the liabilities and equity side, the decrease was a result of a mixed trend of changes: on the one hand, an increase in banknotes and coins in circulation and in other foreign currency liabilities; and on the other, a decline in the balance of net monetary instruments—makam (central bank bills) and term deposits—and in the balance of the revaluation accounts.
There was a significant increase in income from capital gains on foreign currency securities in 2012 to about NIS 1.2 billion from NIS 319 million last year. Income from realized exchange rate differentials also rose to about NIS 1.7 billion from about NIS 500 million last year. The exchange rate differentials are reflected on the profit and loss statement. This income contributed to the increase in other financial income, and to a decrease in the loss presented in the Bank's profit and loss statement for 2012, which stood at about NIS 1.2 billion, as opposed to a loss of about NIS 3.4 billion in 2011.
In 2012, wages and employee rights expenses for Bank of Israel employees were about NIS 264 million, compared with about NIS 275 million in 2011, a decrease of about 4 percent. Pension and retirement pay expenses were about 352 million, compared with about NIS 341 million in 2011, an increase of about 3 percent.
The financial statements are presented in accordance with generally accepted accounting principles (GAAP) adapted for activities particular to central banks, as is generally accepted in other central banks worldwide. In accordance with the Bank of Israel Law, the financial statements were audited by an external auditor, whose opinion is published as an attachment to the financial statements.
The Bank of Israel's financial results reflect the operations of the Bank as it aims to achieve its objectives stipulated by law, including maintaining price stability, supporting growth, and supporting financial stability—and not with the aim of maximizing profits.