an economic advisor to the government puts the bank in a constantly contentious position vis a vis the government and may undermine the banks ’ independence in its core responsibility. i was the director of the research department at that time, and argued in favor of maintaining the role of economic advisor in the law, which was eventually what was decided. several years later, when i became governor, i met stan ( in basel, at a bis meeting ) following one of the heated debates i had with the government, and told him that now i understand and sympathize with his initial view against having the role of the economic advisor. stan surprised me when he said that looking from the outside, he is even more convinced of the importance of this role of the bank of israel. this question was also posed to an independent evaluation committee which was invited to evaluate the boi ’ s research department back in 2012. in their report, they said, and i quote : “ we came to the bank very skeptical of any central bank having the responsibility of being an advisor, much less the advisor, to the government on economic policy ". following a thorough discussion 1 / 3 bis central bankers'speeches with many relevant stakeholders within and outside the bank, they concluded : “ absent fundamental changes in other israeli institutions, we agree that the bank must continue to play the critical role of advisor to the government policy " indeed, the argument against the cb ’ s role in economic policy advice because it enhances the friction between the bank and the government and thus may undermine the bank ’ s independence in its core responsibilities is not unique to the role of economic advisor. in fact, this debate resembles the discussion regarding the question that is debated extensively among central bankers as to how wide should our responsibilities and mandates be defined. i have heard the argument that in some issues the decisions reflect political priorities as opposed to pure economic welfare maximization decisions, and therefore should be left to the politicians, or that they may undermine the central banks ’ credibility or independence. these are valid arguments, and certainly, my tenure as governor has demonstrated that providing a wellgrounded position on some sensitive or publically debated policy issues does raise the level of friction with the government. however, when we think about designing institutions, we should not think in the abstract, and we never start from scratch. we should take the starting point into account, and asses what is the likelihood that a change will get us closer to some “ ideal institutional design ” ( if such exists ).

attorney general and the committee ’ s legislative counsel. i emphasize that we support the sharing of information, and are already working in joint teams to promote it. however, knesset members, you legislated the credit data law a year ago, and imposed on the bank of israel the task of establishing the credit data register. we are working intensively on that, investing huge quantities of manpower and resources. in the current legislation you are liable, with the snap of your fingers — and without allowing the professional entities even the two months (! ) that we requested to examine the issue — to lead to the credit data register, that will be established at tremendous effort and great expense, being a white elephant. this, of course, without any of us being able to say today if one model is preferable to another, and without adequately considering the various aspects of privacy and information security that the economic affairs committee discussed over many months with regard to the credit data law. the minister of finance and i agreed that the information to be transferred, and how it is used, will not conflict with the credit data law, and it was clear to us that the formulation of the details of the bill ( nature of the information, for what use, manner of transmitting the information, etc. ) that will be established in amendments will be through agreement, because these are the areas of the bank of israel ’ s professional expertise, because it is the entity that is establishing the credit data register, and because the entity that issues guidelines to banks is the banking supervision department at the bank of israel and not the minister of finance with the approval of the governor. here too, the bill contradicts the agreement. 1 / 2 bis central bankers'speeches the final thing that brought me here today is to refer to the manner in which some of you addressed bank of israel employees during the course of the discussions. bank of israel employees are public servants who come here to present to you their professional position as an input to the legislative process, and to contribute to the laws you are legislating being better and for the benefit of the public. lashing out at them, when they say something you don ’ t want to hear, insulting and hurtful comments, raising voices — although all these did not deter them, ultimately they are liable to deter excellent professional people from arriving here and telling you their professional truth. such a situation certainly will not improve the laws you are legislating, and is beneath the dignity of the knesset and