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The full reportThe Governor: We chose to conduct this assessment as part of our drive to continue to meet high international standards and as part of the Bank's process of increasing the level of professionalism in recent years. We are studying the team's conclusions and examining their implementation.
A team of international experts invited by the Bank of Israel to assess the work of the Research Department has submitted its recommendations to the Governor. The team, which included top tier economics professors from around the world, was asked to examine whether the Research Department's work optimally facilitates the formulating of policy at the Bank in areas for which the Bank is directly responsible, and if the work supports the Bank in its role of providing economic advice to the government. The evaluation included an examination of the priorities in the Research Department's work plan as well as of the quality of the work. Such assessments are conducted in central banks worldwide, at their initiative, every few years, and they examine, among other things, whether the resources allocated to various research topics are appropriate and if the tools and models used in the research are up to date and meet professional standards.
The team was headed by Professor Laurence Meyer, former member of the Federal Reserve System Board of Governors and Professor of Economics at Washington University in St. Louis. The other team members were Harvard University Professor Elhanan Helpman, Israel Prize winner and Professor Emeritus at Tel Aviv University; Northwestern University Professor Martin Eichenbaum; and Professor Philip Lane from Trinity College in Dublin. The team visited the Bank of Israel in May, and met with the management of the Bank and of the Research Department, with Research Department employees, as well as with sources outside the Bank.
The team's recommendations cover the organizational structure of the Research Department in general, and the establishment of a new division to deal with financial stability in particular; the managerial structure and manpower requirements of the Department; the priorities, and allocation of resources between current monitoring of economic developments and long term research; the periodic reports written by the Research Department; the economic models used by the Department; and the connection between the Research Department and external entities, both in Israel and abroad. The team expressed the hope that its recommendations will aid in maintaining the Bank of Israel's standing as a respected member of the community of the world's central banks and an asset to the State of Israel.
The full report submitted by the team to the Governor of the Bank of Israel is attached.