speak about the need to improve the level of customer service. there are too many justified complaints, and the banks must invest resources to avoid such situations. i would like to clarify the position of the bank of israel on the matter of consumer protection. i am in favor of our involvement in this area, but i would like to place the responsibility where it belongs, and that is with the banks. to clarify my position : the situation should be that a dissatisfied customer first turns to the bank with his complaint, and only then, if he feels the complaint has not been dealt with properly, does he approach the banking supervision department. in a competitive banking system the banks must deal with most complaints against them, with the central bank acting only as the customer ’ s last resort and not his first port of call. in this context i would like to share with you a conversation i had. i was asked how i am settling down in israel, and if i understand what goes on here. i answered that the hardest thing to understand was my pay slip, but the truth of the matter is that there is something even harder to understand, and that is my bank statement. the last topic i would like to talk about is the cooperation between the various supervisors of the financial system. the supervisors currently cooperate with each other, and it is our intention to institutionalize this cooperation in an mou ( memorandum of understanding ). i view this step as a first stage in closer cooperation between the supervisors and the financial system. finally, the new supervisor faces enough challenges to stop him from being bored. his approach will be one of less detailed regulation, and more regulation according to principles. his success in this depends not only on him, but on responsible and competitive conduct by the banks. thank you.

karnit flug : two economies - one society remarks by dr karnit flug, governor of the bank of israel, at the eli hurvitz conference on economy and society “ one society – one economy ”, tel aviv, 19 june 2017. * * * private consumption has led growth in the economy in recent years, covered for the slowdown in exports and in investments against the background of moderate global growth, and supported a significant improvement in labor market data, with an emphasis on weaker population groups. growth based on consumption comes with risks if it is based on factors that are not sustainable, but the main factor in increased consumption in recent years was increased income from labor. the rapid increase in consumer credit in recent years requires closer monitoring by regulators, increased caution on the part of the public and credit providers, and an informed examination of repayment capabilities when providing or taking out credit. growth that is led by consumption generally leads to lower long - term growth. low investment leads to a smaller increase in the stock of capital and in the adoption of technologies that accompany that investment, and lower exports lead to the economy being less able to exploit its relative advantages. the good current state of the economy, thanks partly to the rapid increase in private consumption, makes it necessary for us today to focus on dealing with the challenges we face — improving human capital and workers ’ skills, improving the business activity environment, and investing in infrastructure. all these will ensure improved productivity and a better standard of living in the long term. in recent years, private consumption has become an important component of israeli economic growth, and this has various implications. today i would like to discuss israel ’ s macroeconomic situation in recent years, and particularly the significance of the fact that growth is being led by private consumption, and the long - and short - term implications of this phenomenon. in recent years, gdp in israel has grown by higher rates than in most other advanced economies, but the growth rate of per capita gdp is similar to that of the other advanced economies. in the past year - and - a - half, growth data have been affected by what economists call “ noise ” ( mainly volatility in the import of vehicles ), but excluding that noise, the growth of gdp has accelerated, and it currently stands at about 4 percent in annual terms. this is an impressive rate, particularly if we take into account that world trade, which reflects global demand for our exports, increased by an average of about 3 percent