1. SWOT Analysis of the Israeli Capital Market
February 2008

2. Strengths Human capital “Jewish Profession”
Positive momentum due to progress in the capital market

3. Strengths - continuation
Culture of entrepreneurship in a wide range of fields
Varied spoken languages in Israel
Close proximity to East and Central Europe (between East and West)
Trade on Sundays

4. Weaknesses Geopolitical situation (perception and reality)
Governmental instability
High bureaucracy
Decentralized regulatory system
Concentrated financial market

5. Weaknesses – continuation
High National Debt (530 Billion)
High burden of mandatory pension
Not enough use of English (financial statements, etc.)
Lack of financial education

6. Opportunities Proximity to developing markets in East Europe and Asia
Jewish money that’s looking for investment
Jewish and ex-Israeli human resources – attraction to Israel
Existing mechanisms of raising capital of the Bonds, Keren Kayemet, the Jewish Agency, Keren Haysod, etc.

7. Threats Geopolitical situation The sub-prime crisis
Non-harmonious regulation
Strong workers unions (mostly banks)

8. Necessary conditions for a global financial center
Growing and stable economy
Professional and high-quality manpower
Advanced and stable regulation
Simple and certain taxation
Advanced technological infrastructure
Advanced leagal system

9. Financial Sector Data Number of people employed –
83 thousand hired which is 3% of the labor force
Average salary: 16.7 thousand NIS a month, which is more than double the average wage (7,600)
30 Billion NIS contribution of the financial sector,
which is 5% of the GDP

10. The Main Issues Development of the financial industry
Development and advancement of financial tools to enhance competition in the capital market
Accessibility of household, small and medium sized business to the capital market and currency
Harmonization and equalization of infrastructure of regulatory bodies
Human capital

11. Summary Agenda for the capital market for the next 10 years
Balance between:
Enhancing the competition: piece of the pie
Developing the capital market and production of financial services: increase the pie
The goal: looking for opportunities and utilizing potential for a financial center