relatively healthy labor market, which is quite different from what we see in both the us and europe. this growth is taking place without any pressure on wages. in both the business sector and the public services sector, wages are quite stable, which says that the labor market has not yet exhausted its growth potential, and is thereby not leading to inflationary pressure. as such, overall, developments in the market do not provide a clear picture, and we can even say that they provide more of an impressionist picture, and that anyone can interpret it any way he wishes. the data that we saw, in any case, did not lead to a clear conclusion that made it necessary to change policy in either direction. the third objective of the bank of israel is to support financial stability. in this context, it is of particular importance that we look at the level of leverage in the economy, and at asset prices, and ask ourselves whether we see any risks from this direction. in many places, including at this conference, and certainly at many central banks, people deal with the very complex issue of the low interest rate environment, both in israel and abroad, and with the distortions that may be created by such a low interest rate level. this is also an issue that we discuss. when looking at early indicators of financial instability, we need to look not only at the levels, but also at the growth rates – of both prices and of levels of leverage. and here, the picture that we have in israel is quite different from almost every other economy that we know. the overall burden of debt in the economy – the total debt of the public sector, the business sector, and households, relative to gdp – has been declining very slowly over the bis central bankers ’ speeches past few years. the government is adopting a long - term policy of reducing the debt burden, and we can see that between 2007 and 2013, the burden of debt of the public sector declined by 7. 5 percentage points. in contrast, in most advanced economies, we saw very rapid growth in the public sector debt – 29 percentage points in europe, and 40 percentage points in the us. in terms of the level, israel ’ s debt - to - gdp ratio stands at 67 percent, a marked improvement compared to the past, even from the standpoint of relative position. if we look at the business sector during the same years, we can see that in israel, there was a decline of 25 percentage points in the ratio of business sector

to financial markets, and not to other markets where the fall and rise of companies are part of the normal course of business, because there is something about the nature of financial services that make them particularly fragile : the seductive appeal of leverage. anyone who has tasted it can be excessively charmed by it, and when things turn sour the impact on the rest of the economy can be large and long lasting – as we have seen again recently in so many countries, including developed countries that had presumably well developed and regulated markets. the size of the financial sector relative to the economy in israelis close to the oecd average. a few countries such as switzerland, ireland and the uk have become financial hubs and are exporting various financial services to other countries. in the case of switzerland, the services exports are mostly asset management, ireland ’ s are mostly back office services, and in the uk it is mostly financial intermediation. the value added of financial intermediation in israel was 5. 1 % of gdp in 2013, slightly less than the 5. 4 % average in oecd countries. bis central bankers ’ speeches total assets of the banking sector in israel a share of gdp stood at 127 % in 2014, well below the oecd median ( 243 % ) and average ( 247 % ). in fact, the total assets of the banking sector as a share of gdp has been contracting for the past decade from its peak of 147 % in 2002. at the same time, the assets that you, the institutional investors, manage have grown over the same period from 67 % of gdp in 2002 to 117 % in 2014. we may not know whether the financial sector is of optimal size, but these figures show that israel appears to be pretty much where one would expect it to be, neither very large nor very small – a reassuring figure overall. turning now to the trickier and thornier issue of the sector ’ s competitiveness, we do not have all the indicators needed to make a perfect assessment of the situation, but we do note that the concentration in the banking sector is substantially higher than that of developed countries. perhaps even more striking is the area of consumer loans, which is entirely dominated by the banks, and in particularly by the large banks in israel. this was always the case, but as banks have receded from granting credit to large corporations, they have increased credit to consumers. indeed during the past decade, retail credit, including mortgages, has grown much faster than