Presentation on theme: "1 The banking system in Israel in view of the global crisis Herzliya Conference February 4, 2009 Roni Hizkiyahu, Supervisor of Banks."— Presentation transcript:
1 The banking system in Israel in view of the global crisis Herzliya Conference February 4, 2009 Roni Hizkiyahu, Supervisor of Banks
2 Government and central bank intervention Governments and central banks are taking far-reaching measures to mitigate the on- going financial crisis: Injecting capital into the banking and finance system, nationalizing banks. Acquiring toxic assets from the financial system. Guaranteeing the debts of the banking system. Cutting interest rates. Extending the use of collateral, recognizing other forms of collateral. Activity in trading vis-à-vis the banks.
3 Extent of the impairment of the market value of international banks In US $ billion June 2007 compared with January 20, 2009
4 Rate of impairment in the market value of Israeli banks and international banks June 2007 compared with January 20, 2009
5 30 Capital to risk assets ratio The five banking groups 2000 – 9/2008 %
6 Capital adequacy in the banking system The target for capital adequacy is at least 12% by December 2009. Assuming that the financial crisis will still be in full swing, this indication must be adhered to. IMF and other international entities recommend improving the capital adequacy and raising capital at this time. Regulators worldwide are making a concerted effort to increase the capital ratio ( US – 12.8%, England – 12.8%, Switzerland – 12%, Canada – 12.3%, Israel 11.5%), including the primary capital ratio requirement. Concurrently, these countries are working to provide sources for improving the capital adequacy in the banking system.
7 Development of corporate banking and non-banking credit NIS billions, current prices
8 Interest developments in the non-linked sector For the seven largest banks, December 31, 2007 December 31, 2008
9 Summary Israel's banking system is stable Further difficulties and challenges in the financial and real system are expected this year. We must therefore: Maintain a stable banking system. Work to encourage the non-banking credit market. Work to revive the capital market.