The Bank of Israel has raised its risk assessment for the stability of the financial system due to the effects of the macroeconomic environment (including the government attempt to change the judicial system)from a “medium-low” (yellow) level, where it had been until now, to a “medium-high” (orange) level. In the bank’s Financial Stability Report for the first half of 2023, published this morning, bank economists repeatedly note that the government’s steps in the area of fiscal policy are the primary source of risk to financial stability in Israel and to damage to the economy.
The Financial Stability Report is published twice a year and details how the Bank of Israel operates to ensure this stability, and what risks to stability are identified by the bank. The report includes a series of analyses on the Israeli economy, reflecting an increase in the level of risk to financial stability.
