OECD Economics Department Working Papers

ISSN :
1815-1973 (online)
DOI :
10.1787/18151973
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Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.
 

Issues in Private-Sector Finance in Israel You or your institution have access to this content

Authors:
Philip Hemmings
Publication Date
06 Dec 2011
Bibliographic information
No.:
913
Pages
32
DOI
10.1787/5kg0s2dw8qxx-en

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The 2008-09 global financial crisis did not result in the failure of any major financial institution in Israel, but it did reveal vulnerabilities in the non-banking sector . particularly in the corporate-bond market. Conservative regulation of the banking sector helped this segment avoid a financial meltdown, and low loan-to-value ratios in mortgage lending are undoubtedly helping limit the pace of house-price increases. Nevertheless, as elsewhere, capital requirements and stress tests for banks have been ramped up. Also the identification and monitoring of systemic risks and macro-prudential problems has intensified. In the Israeli context somewhat unusual issues arise from the control of most of Israel.s major financial institutions by family-based business groups that have significant interests in non-financial sectors of the economy. This close link between the financial and non-financial sectors generates potential risks to financial stability, and it is a key issue in a wider debate about the relative merits of the business groups in terms of competition and control in the economy. This Working Paper relates to the OECD 2011 Economic Survey of Israel (www.oecd.org/eco/surveys/Israel).
Keywords:
finance, Israeli banking, business groups, micro-prudential oversight, macro-prudential oversight, Israel, corporate bonds, pensions, corporate governance, bank, institutional funds, Israeli finance, securitisation
JEL Classification:
  • G01: Financial Economics / General / Financial Crises
  • G21: Financial Economics / Financial Institutions and Services / Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
  • G22: Financial Economics / Financial Institutions and Services / Insurance; Insurance Companies
  • G23: Financial Economics / Financial Institutions and Services / Pension Funds; Other Private Financial Institutions
  • G28: Financial Economics / Financial Institutions and Services / Government Policy and Regulation
  • G38: Financial Economics / Corporate Finance and Governance / Government Policy and Regulation