Bank of Israel Governor Stanley Fischer. Close supervision
Photo: Gil Yohanan
Bank of Israel buys bankruptcy model
Central bank to pay NIS 650,000 for database from Moody's Analytics, which will facilitate prediction of risks potentially leading to crash
The Bank of Israel is laying down measures to prepare for a judgment day scenario, Calcalist has learned.
The database compiles statistics of 500 Israeli companies as well as of and global companies which do business with Israeli companies.
The central bank's research division, in conjunction with the bank's markets and banks supervision department, recently acquired from Moody's Analytics a bankruptcy statistics database of companies in Israel and around the world.
Alarm Bells
Tomer Zelzer, Calcalist
In 2010, Bank of Israel analyzed banks' endurance in extreme scenario that now seems more real than ever: Market slides and crash of economy's two largest conglomerates. Results were encouraging. Concerns: Ongoing crisis will lead to credit crunch, harm business sector
Moody's Analytics is a subsidiary of global credit rating company Moody's Corporation. The comp operates in 26 countries, specializes in enterprise bankruptcy prediction and holds a unique database which compiles statistics on thousands of companies from around the world across Industries.
The data was collected over the past 10 years and also includes information on some 8,000 cases of bankruptcy.
Moody's Analytics provides risk measurement and management services to companies across credit, economics and financial risk management and among its clients are commercial banks, insurance companies as well as public sector bodies such as the European Central Bank.
The Bank of Israel signed a three-year agreement with Moody's Analytics during which the Bank will pay an overall NIS 650,000 (about $180,200) linked to the dollar.
The considerable financial resources the Bank of Israel willing to allocate for the information on the resilience of Israeli companies testifies to the seriousness the Bank attributes to the issue.
The central bank has proven in the past that it keeps a finger on the pulse and can identify risks long before they manifest.
Over two years ago, Bank of Israel Governor Stanley Fischer predicted the downfall of one of Israel's tycoons and within just several months the economy saw the outbreak of the Africa-Israel and Lev Leviev affair.
Click here to read this report in Hebrew
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