Minutes of the Telbor Committee Meeting Held on March 2, 2009

Committee members: Sharon Lavi, Harel Cordova, Roy Stein, and Simha Hochman (representative of the Information and Statistics Department).
Reuters: Miriam Dembak and Amnon Ortner
 

In this meeting, a continuation of the committee's previous meeting of February 9, 2009, several issues were discussed and certain decisions were made:
 

1. The Reuters representatives pointed out that the updated list of contributing banks as published by the Committee will come into effect in mid-March. In addition, the Reuters representatives are preparing to add a condition to the calculation of the fixing in accord with the Committee's decision: In the event of less than five quotations (for each period), the fixing will not be calculated automatically and will not be published immediately in the regular format by the Reuters system, but the committee members will guarantee publication by the end of that day. The new condition will come into effect from the beginning of April.
2. Reuters' customers use two methods of communication for transferring information with the help of Reuters' software: a) Insert-link-Reuters' designated software, which is installed in the customer's computer, and which transfers the data to a special page of the bank in Reuters. Reuters then uses this page for building the logical code of the data in the Reuters system. The software allows for manual typing or a link to Excel; and b) Market-link-the use of Excel files that combine functions built by Reuters for transferring information directly in order to build the logical code of the data in the bank's Reuters system. This method is simpler and eliminates two stages (as well as the need for an intermediate Insert-link application). It is therefore recommended that any contributing bank that has not upgraded its information system to this method should do so.
3. It was decided that at the start of each day the Reuters system will "remember" the last quotation of each of the contributing banks on the previous day, and will display it on the screens. Each bank, of course, is responsible for entering the system and changing the interest in accord with its assessments. In addition, Reuters' representatives will be responsible for transfer of the quotes and will send warnings to the representatives of the contributing banks (to at least two representatives of each bank) as follows: At 10:30 a.m. a warning that interest rates have not been changed (if the bank changed one interest out of eight interest rates in the different periods, it will not receive this warning). At 11 a.m. a warning will be issued in the event of an abnormal spread between the bank's quotation and the temporary theoretical average (see the definition in Section 4). It was decided that the warnings will be sent to the representatives of the contributing banks by e-mail and by SMS, as well as to the committee's representative, Guenia de Mayo. The contributing banks are responsible for submitting the names and e-mail addresses of at least two representatives in each bank to Miriam Dembak.
4. Definition of an abnormal spread: The gap will be calculated as the difference between the bank's quotation and the temporary theoretical average-in accord with the rules determined for calculating the fixing Telbor. A gap in the ON interest will be defined as abnormal when the above difference is greater than 15 base points, and for long-term interest rates-when it is greater than 25 base points. A contributor who is interested in a different spread is requested make an orderly application to the Committee, and it will be considered.
5. Any warning and any telephone conversation on the subject will be documented in the Reuters database, and in the event of any disagreement on the quality of the data in the system, the preceding events can be reconstructed.
6. The timetable for completing all the changes proposed in Sections 3-5-including the transfer of responsibility for monitoring that the quotes to Reuters are operating properly-will be the beginning of July, 2009.
   
   In conclusion, committee members are of the opinion that these technical changes, as defined in the joint meeting with Reuters' representatives, will overcome many communications faults and problems. Initial rapid contact will thus already be made between the representatives of the contributing banks and the Reuters system at 10:30 a.m. on each business day. These actions are designed to increase the reliability and the transparency in the process of determining the Telbor-a goal to which the Telbor Interest Committee attributes the utmost value.