Bank of Israel Governor Stanley Fischer convened the heads of Israel's banks Wednesday morning to discuss how the developments on the international financial scene will affect Israel.
Fischer will expect to hear what measures the banks are taking in order to weather the storm and minimize the risks.
Finance Minister Roni Bar-On said today that he has "great confidence in Israel's financial network. The Israeli economy is totally different than the American economy. The man who heads the Bank of Israel, Governor Stanley Fischer, is an excellent professional who knows the American market very well and is an expert at dealing with crises... We are relatively immune to the affects of the world crisis."
Bar-On spoke with both Army Radio and Voice of Israel, evidence of his desire to exude financial confidence to the Israeli public.
He spoke, however, after the U.S. market had begun to recover somewhat, following the decision of the U.S. Federal Reserve Board to lend as much as $85 billion to rescue the insurance giant AIG (American International Group).
In any event, the Chairman of the Banking Association, Moshe Perl, said that if the U.S. suffers a recession, "there is no way we will escape the results. We export 30% of our goods to the U.S., and 25% of our tourists come from there."
The heads of Bank HaPoalim and Bank Leumi, Tzvi Ziv and Galia Maor, respectively, expressed confidence that Israel would weather the storm.
Dollar and Euro - Falling, not Diving
By this morning, the dollar had lost some 12 agorot, or 3.3%, over the past few days, and even briefly dipped below the 3.5 shekel mark last night. It rose on Wednesday, closing at nearly 3.55 shekels to the dollar. The euro, as well, dipped below its benchmark of 5 shekels, for the first time in five years, but closed at over 5.05 shekels.
The Tel Aviv Stock Exchange (TASE), too, opened the day's trading on the upswing, up 2.4% by 10:30 AM, then began to drop as the day wore on.
The Bank of Israel, the Finance Ministry and the Bonds Authority have been in constant and close contact over the past few days, checking Israel's exposure to the U.S. banking crisis. Maariv/NRG reports that Bank of Israel is checking the exposure of the banks and financial institutions, the Finance Ministry is investigating the public bodies, and the Bonds Authority - the trust funds.
The Bank and the Ministry announced that they are carefully following the markets around the world, and are prepared to take necessary actions to prevent a similar crisis in Israel.