Israeli banks told to cut international operations
The banking supervision department of Bank of Israel has directed banks in the country to further tighten their monitoring mechanism of branches outside the country. The central bank had earlier brought in several measures to contain international activity the banks. This is a further step in the same direction. The bank said the country’s banks have significantly reduced their overseas activity in recent years. As a complementary step to this reduction, it is demanding that the banks reconsider their remaining overseas business and restrict it to a small number of important countries and branches in a way that will facilitate an allocation of resources that is suitable in extent and quality for the sake of appropriate risk management. Banks will now have to redefine the strategy for overseas activity and their risk appetite for it. The aim apparently is to reduce activity in emerging markets, where the risks are considered much higher.