Treasury attack on the Bank of Israel: Not serious report, based on data …


The Ministry of Finance today (Tuesday) sharply attacked the Bank of Israel after the publication of its report stating that the corona crisis is more severe than Israel was initially prepared for. According to executives, for the benefit of the report “used outdated data and did not contact us to provide them with data.” Bank of Israel: “We are sorry that this is the Treasury’s response, which ignores the time frame and professional analysis of the report.”

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The same sources added that “once the Bank of Israel was the responsible adult, today it is no longer an adult and certainly not responsible. Hopefully they are conducting interest rate discussions more seriously.”

This sharp and unusual attack follows a serious report published this morning by the Bank of Israel, in which it stated, among other things, that the corona crisis puts the Israeli economy at a medium to high level of risk.

In the report, the Bank of Israel revealed that in order to finance the state’s extraordinary expenses from March – the month in which the epidemic broke out in Israel – until July, the government raised about NIS 42 billion in Israel and about NIS 46 billion abroad. S. downgraded Israel’s rating horizon in April from “positive” to “neutral.”

“What particularly troubled the rating company was, apparently, the government’s budget performance, including the deficit, which reached 4%,” the report said. “In its announcement, the company stated that Israel’s budget policy is not characterized by the resilience required of countries with a similar ranking.”

The official response published by the Ministry of Finance to the report states that “the Bank of Israel has published data on an international comparison of the assistance programs of the various countries, without specifying the source of the comparison and probably based on outdated data from Goldman Sachs.”

“The figure attributed to the State of Israel was incorrect for the previous aid package (7.1% of GDP), and certainly not true for the current package (13.9% of GDP),” it said. “The Ministry of Finance clarifies that the level of assistance of the State of Israel is higher than the average level of assistance of the OECD countries. We are convinced that working together will prevent such mistakes in the future.”

Bank of Israel response: The semi-annual financial stability report published by the Bank of Israel analyzes various issues within the first half of 2020. As such, it shows illustrations that reflect the period analyzed by Bank of Israel economists. “International Goldman Sachs, which indicates Israel’s location close to the center of comparison between the countries. We are sorry that this is the response of the Ministry of Finance, which ignores the time frame and professional analysis of the report.”


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