They constitute an important and central layer in the global capital markets, because they can be used to increase the financing possibilities for the business sector. Benchmark rates also provide infrastructure for the interest rate futures market, where contracts enable businesses and the public to mitigate and even neutralize interest rate risks.
In many economies around the world, there are two common types of financial products based on benchmark interest rates: (1) Deposits, loans, and mobile nominal interest bonds to various periods; and (2) interest rate derivatives. In Israel, unlike many other advanced economies, activity is currently conducted mainly in the assets themselves, and not through derivatives.