Central Banking magazine announced this
morning that it has chosen the Bank of Israel as the winner of the 2017 Reserve
Manager of the Year award. The decision was made by a panel made up of the
magazine’s Editorial Team and Editorial Advisory Board, which comprises former
central bank governors from around the world.

panel noted that in view of declining returns in sovereign bond markets, the
Bank of Israel took steps to improve risk-adjusted returns, by expanding the
reserves’ investment to equities and corporate bonds. The panel said it was particularly
impressed by “the carefully managed evolution” of the Bank’s reserves
management framework, the “pioneering work its market operations team is
conducting” related to sensitivity analysis of the investment portfolios, as
well as the Bank’s “in-house development and nurturing of in-house expertise as
it has embraced risk-based diversification”.

Banking editor in chief Christopher Jeffrey, who served as chairman of the
Awards Committee, said, “The Bank of Israel has emerged as a pioneer when it
comes to seeking out improved risk-adjusted returns from its growing foreign
exchange reserves. The market operations team, led by Andrew Abir, is also
keenly aware of the risks involved, given the long-anticipated shift in the
interest rate cycle, political events and the unpredictable nature of

of the Bank of Israel Dr. Karnit Flug said, "We are honored to receive
this award and I would like to thank the Central Banking Awards Committee for
having chosen us. We are very proud of the recognition of all the hard work
that has been done by our Market Operations Department over the last few years.
The challenges for reserves management have dramatically increased.” The
Governor said that the very low yields in developed economies highlighted “the
need to achieve adequate returns while maintaining the purchasing power of the
reserves as well as a high level of liquidity. The Bank of Israel, like many
other central banks, has expanded its universe of eligible assets to meet these
challenges, alongside adopting a comprehensive risk framework”.

Banking magazine, founded in 1990, is published in London. It is the only
independent magazine dealing with central banks. It has subscribers in 140
countries, including most central banks. This year’s prize follows the
magazine’s granting in 2016 of the “Transparency Award” to the Bank of Israel.
The magazine grants several awards each year in the area of central banking.

For the announcement at the Central Banking website click