To the extent that the global banking and wider financial market collapse of late 2008 reflected both a sharp upward revision in market estimates of risk, combined with a sharp downward movement in risk appetite, it is not surprising that the global regulatory response has been in the direction of seeking to shift risk to where such reassessments and changing appetites can do less damage.
Moreover, further development of the financial infrastructure and greater competition in the capital market, particularly between the institutions that operate vis-à-vis households, is the right path to follow, and would contribute to growth. I would now like to address three specific issues: 1) monetary policy; 2) the economic situation in light of the political situation; and 3) Israel's membership of the OECD.