policies that require a measure of perseverance. how then do we promote competition in the financial system in general and in the banking system in particular? how do we expand the competition in the business sector and the mortgage market to also include households and small businesses? in view of the statements made recently, i would like to stress, as unambiguously as possible, that the bank of israel has been working towards ensuring the interests of the public, including the promotion of competition! competition is critical for the existence of an advanced financial sector. without competition, our banking system will not develop, the quality of service provided to customers will be adversely impacted, the consumer will lose confidence in the system and eventually there may also be consequences for stability. therefore, we are in favor of encouraging competition. competition does not contradict stability. let me repeat that in order to make sure that the message gets across – we are promoting competition in the banking system. we have done so in the past and we will do so in the future. how has the bank of israel worked to encourage competition? one of the barriers to competition is the difficulty in switching between banks and the entities that compete with them. the bank of israel is working to remove these barriers and will continue to do so. the zaken committee did not wait for the entry of new players and drew up a list of measures that strengthened the position of households and small businesses and increased the level of competition. the vast majority of those measures have already been implemented by the bank of israel. these include, among others, making it easier to switch banks and providing the possibility of implementing more bank activities on the internet, such as opening and closing of accounts. the banking supervision department recently issued an innovative directive that expands the activities that can be implemented by electronic communication, which has a huge potential for increasing competition between the banks. in general, the bank of israel views bis central bankers ’ speeches technology as a challenge for the banking system and also as a powerful lever for improving service to customers and lowering its price. the activity of the bank of israel to increase competition for the benefit of the consumer goes beyond making it easier to switch banks. another barrier to switching banks is the fact that a customer ’ s current bank knows the customer better than the bank he would like to move to and as a result the customer may be apprehensive that he will not be able to obtain loans at a good interest rate from a bank that doesn ’ t know him as well

are allowed or even encouraged to seek profits by taking on excessive risk and at the same time imposing high risks on the general public. this occurs when regulators are unable to monitor these risks or, even worse, ignore them. our responsibility to the public is a long - term one and requires us to prevent such a situation. we will not agree to measures that in the name of competition will enable financial entities to operate without there being a supervisory body with an overall perspective of stability and consumer welfare, which in the first stage will harm the consumer and in the second stage the general public. many countries and millions of unemployed people all over the world are still paying the price of irresponsible financial activity. how does the bank of israel view the maintenance of stability? we have seen that the banking system in israel is indeed stable and weathered the worst global crisis since the 1930s bis central bankers ’ speeches relatively unscathed. we at the bank of israel want to make sure that the system will also endure the next crisis, if it occurs. how are we doing so? first and foremost, it is important to understand – and this is something that is not sufficiently emphasized in public discourse – that maintaining the stability of the banking system is not meant to serve the interests of the banks or their managers and employees, but rather to serve, first and foremost, the interests of the banks ’ customers, the economy as a whole – the public. maintaining stability means that when we deposit our salaries with the bank, we can sleep at night and can feel sure that we will be able to use that money when we need to ; that when we save for our children, we can be confident that those savings will be available to them when they grow up ; and when a businessman or factory receives a commitment, that commitment will be honored. the lessons from the global crisis in 2008 taught us that instability in the financial system has long - term consequences on employment, growth and welfare in general. the fact that israel weathered the crisis in 2008 relatively well emphasizes the need for professional and efficient supervision and illustrates the possible implications of not having such supervision. the responsibility for maintaining a stable financial system rests with the bank of israel and we will fulfill that responsibility ; but it also rests with the government and other regulators. the financial stability committee is an appropriate framework for coordinating activity and for the monitoring of risks and will make it easier to deal with those risks at an early stage. as we have come to realize following the series of financial crises during