The Markets Department of the Bank of Israel, together with the Ministry of Finance’s Accountant General Department, the Israel Securities Authority and the Tel Aviv Stock Exchange, issued a call for proposals as they assess whether and how to develop a domestic market for repurchase transactions backed by Israeli government bonds. The joint taskforce sets out the case for building a more developed repo market, noting that current local repo activity is limited, concentrated among a small number of intermediaries, and features lower-than-potential participation by international institutions, with previous initiatives hindered by macroeconomic conditions and legal and tax barriers. It is asking for feedback on barriers to development and how to address them, whether a structured framework is needed, the suitability of government bonds as initial collateral and potential alternative collateral, expected impacts on liquidity solutions in ILS and foreign currencies, preferred transaction types and terms, and the relative merits of bilateral, triparty and central counterparty-based models, including whether to use a dedicated trading venue, an international platform or bespoke connectivity. Written responses are due by March 13, 2025; submissions will be reviewed and respondents may be contacted for follow-up.
Bank of Israel 2025-02-06
Bank of Israel and partners seek public input on feasibility of an Israeli government bond repo market
The Bank of Israel, in collaboration with the Ministry of Finance, Israel Securities Authority, and Tel Aviv Stock Exchange, is soliciting proposals to evaluate the development of a domestic repo market backed by Israeli government bonds. The initiative seeks feedback on barriers, framework needs, collateral suitability, liquidity impacts, transaction preferences, and market models, with responses due by March 13, 2025.