The Bank of Israel published its Financial Stability Report for the first half of 2024, reviewing financial developments and assessing system stability amid the ongoing Swords of Iron War in Gaza and its expansion to other areas. The report concludes that Israel’s financial system has shown good resilience, supported by adequate capital ratios, liquidity and absorption cushions in the banking system and among insurance companies. Macroeconomic risk remained high due to the security situation and weaker-than-usual economic activity, alongside higher government financing needs and costs and credit rating agency downgrades. The assessment notes that a low debt-to-GDP ratio before the war and the Bank of Israel’s high foreign exchange reserves support stability; domestic equity indices rose moderately, while equity pricing indicators suggested relatively low valuations. Private-sector credit increased by NIS 51 billion in the first half of 2024, mainly in real estate and mortgages; banking credit arrears remained low overall, with a slight increase in the share of debt in arrears in certain sectors, particularly large businesses and construction companies.
Bank of Israel 2025-11-11
Bank of Israel Financial Stability Report finds Israeli financial system resilient despite war as private-sector credit rises NIS 51 billion
The Bank of Israel's Financial Stability Report for H1 2024 highlights the financial system's resilience amid the Swords of Iron War, supported by strong capital ratios and liquidity. Despite high macroeconomic risks and increased government financing needs, stability is bolstered by a low pre-war debt-to-GDP ratio and substantial foreign exchange reserves, with private-sector credit rising by NIS 51 billion, mainly in real estate and mortgages.