Financing and Credit

The Financing, Debt, and Credit Division is responsible for all financing activities within the Accountant General's office. The division’s activities include government debt management, funding of the deficit, treasury management and liquidity, state guarantees, the government collection system, the government insurance and the "Internal Fund for Government Insurance". Additionally, the Ministry of Finance's New York Office reports to this division.

Roles:

The Financing, Debt, and Credit Division handles the following key functions:

• The Government Debt Management Unit (GDMU): This unit is comprised of three offices: Front Office, Middle Office and Back Office.
• Front Office includes:
  • Issuance Department: is responsible for issuing Israel Government bonds and conducting switch and buyback auctions in the domestic tradable market.
  • Global Debt Capital Markets and Foreign Currency Transactions Department: is responsible for issuing bonds in foreign currency, and executing hedging transactions on debt stock nominated in foreign currency. Additionally, the department is responsible for relationships with credit rating agencies that rate Israel as a sovereign, and investor relations with the countries' global investor base. The department also manages the Ministry of Finance office in New York and oversees the Israel Bonds Organization.
• Middle Office:
  • Risk Management Department: is responsible for the long-term strategy of the government debt portfolio management as well as the issuance strategy, while analyzing various finance risks (Refinance, Liquidity, Market & Credit risks). In addition, the department is responsible for government finance forecasts in times of emergency and provides financing advice to different government units in a variety fields.
  • Middle Office Department: is responsible for overseeing the market making activities in government bonds, ranking the primary dealers according to their primary and secondary market performance, and monitoring the MOF bond lending facility. In addition, the department monitors compliance of the operations performed by the various departments in accordance with the established procedures.
  • Domestic Debt & Liquidity Department: is responsible for the government’s cash flow in both shekel and foreign currency, and ensuring that the funding sources meets the government’s financial needs. As a result, the department provides recommendations on the amount of funding required from the domestic and global markets, and presenting an updated macro-economic status for decision makers.
• Back Office: Is responsible for all payments and receipts of government debt, maintains accounting of transactions on the government’s "Merkava" system, and manages the amortization schedules of all of the government debt in domestic and foreign currencies. The Back Office makes all of the government debt payments.
   
• Ministry of Finance Office in New York: is responsible for the relationship with the "Israel Bonds" organization and its associated fiscal agent. In addition, the office serves as part of the Government Debt Management Unit with regards to global bond investor relations, while operating Ministry of Finance delegations in North America.
   
• State Guarantees Department: Is responsible for the state guarantees according to the State Guarantees Act of 1958. State Guarantees is a unique financial tool to aid developing companies with economic importance in the Israeli market. The department is in charge on analyzing the needs of state guarantees, pricing and their ongoing management. State Guarantees department leads various projects in different topics according to international standards and in line with methodologies which operate in most of the OECD countries. Two of the key projects of the department include:
  • Trade Risk Insurance for Israeli Exporters
  • The state guaranteed loan fund for Small and Medium Businesses.
     
• Credit, Collection, and Insurance Unit: the unit operates in three main topics:
  • Credit: the unit oversees the credit tenders in the government, such as the "Savings for Every Child" program, state employee loans, state backed loans for those with a low credit rating, and assist different government units for credit tenders. In addition, the unit is responsible for the government interest policy and publishes the Accountant General’s interest rates.
  • Collection: the unit leads the government reform in collecting debts, regulates policies, guidelines, and uniform rules that instruct government offices shaping protocols that support greater debt collection, including supervising collection. The unit uses different activities to expand the scope of collection, implementing uniform processes that help government offices and citizens regarding payments, and helps to reduce the formation of additional debts to the government. In addition, the unit leads technological projects with the purpose of creating information system and consolidating debts collection. This includes professional training for government offices. The unit leads the Accountant General’s supreme committee for comprises and debt settlements.
  • Government Insurance: the unit oversees the regulation of government insurance policy through the supervising committee on "The Internal Fund for Government Insurance". The unit manages the professional relationship with the Inbal Insurance government company, which coordinates the operations of the government property and liability insurance, and works to solve market failures in the insurance sectors. In addition, leads processes to improve the financial and insurance preparations in case of emergency.