steps to make monetary policy more accommodative? first, because the trend of inflation changed. it is not clear to us at this point if it is noise in the data — loud noise, to be sure, but noise — or a fundamental decline in inflation. however, it is clear to us that we have to continue to strive and raise the inflation rate toward the midpoint of the target range. second, the risks have intensified. should the risks be realized, we will want to act in a timely manner, in order to prevent to the extent possible a slowdown in economic activity. how will we do that? we have a range of tools, and they are all on the table. there are the standard tools, and we are refreshing the toolbox regarding tools that have not been tried here, or have not been used for a very long time. and one more comment on monetary tools — in recent weeks the issue of the foreign exchange market has been in the headlines. therefore, maybe this is the time to clarify — i did declare that in principle i would prefer that the exchange rate would be set by market equilibrium, and that was the also the bank ’ s approach before i took office. practically, there is a window of exchange rates that we view as consistent with price stability and economic activity, when we take into account all the factors and variables in the economy. the window is dynamic, and depends on parameters that change all the time, which naturally should not be disclosed. from this perspective, the bank of israel policy on this issue could be called “ constructive ambiguity ", which is the appropriate policy for a small economy such as israel ; and therefore, if and when the bank of israel will assess that the exchange rate has materially deviated from the window that we defined, we may very well intervene in the market — and no one will receive a warning letter from us beforehand. thank you! 4 / 4 bis central bankers'speeches

. a large number of financial entities, including those not obligated by law, joined the system and began reporting to it and receiving data from it. we also set out the separation of two credit card companies, while ensuring that the parameters of the separation support the goals of the reform. i am also happy to update that the financial stability committee has already met several times and is making progress with the formulation of its tools and work procedures. we presented to the government an extensive and clear analysis on the need to carry out fiscal adjustments. in parallel, we presented a plan to improve the standard of living and productivity in the economy — with an emphasis on operative policy proposals. we are not blind to the housing issue, and its impact on the young generation. therefore, i asked the research department to begin formulating operative recommendations in the housing area, in order to help the new government identify the order of priorities and to act to remove obstacles that weigh on increasing the supply of homes. in a joint initiative with the imf, we are developing a new macroeconomic model, which takes into account two sectors that to date have not been included in the common models — the housing market and the financial system. recall that these two were among the main factors in the 2008 crisis. the model will serve us in macro assessments but will also contribute to the work of the financial stability committee. in another joint initiative with the imf, we are working on an international conference on cyber risk in the financial and banking system, with the understanding that looking forward, this is one of the main risks to financial stability. given the changes in the global economy, and with eyes to the future, i initiated a strategic process to define the bank ’ s goals for the coming years. the entire management has been enlisted in this process, which is being conducted by the director general of the bank, hezi kalo. it is not straightforward to carry out such a process in the midst of the ongoing work that is always very intensive, but it was clear to me that we must look beyond the immediate issues. therefore, we added a slogan to the process — “ working today, thinking about tomorrow ”. i asked the members of management to think outside the box, and to try to identify the important challenges that the bank of israel and the israeli economy will deal with in the coming years. to that end, we set up several teams, with the participation of tens of staff and managers, in all the relevant areas : the first