Review of the Reference Rate in Israel: Telbor and Makam Markets

Roy Stein ()

No 2016.12, Bank of Israel Working Papers from Bank of Israel

Abstract: The reference rate markets are an important and central feature in capital markets around the world, through which it is possible to increase financing possibilities for the business sector and reduce exposure to the risks of unexpected changes in the interest rate. The Telbor market, a platform for setting reference rates for the short-term nominal interest rate in Israel, has developed markedly in the past decade—but only in the area of interest rate derivatives. These derivatives have matured greatly, even more than the widespread activity in foreign exchange derivatives. Due to the many manipulations of reference rates discovered worldwide—the Libor rates—it is interesting to examine the interest rate markets in Israel and their characteristics. Therefore, the research question dealt with in this study regards the structure of the markets, and its objective is to determine which of the two main interest rate markets in Israel—the Telbor market or the Makam (short-term nominal-interest central bank bills—up to a year) market—is the preferred platform for determining the reference rate. The study also examines the Telbor market in Israel as compared to the Libor market, and discusses as well the basic characteristics that are important for the efficient functioning of the reference rate market, delineating the many benefits in continuing the development of this market.

Pages: 41 pages
Date: 2016-11
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://boiwebrepec.azurefd.net/RePEc/boi/wpaper/WP_2016.12.pdf First version, 2016 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:boi:wpaper:2016.12

Access Statistics for this paper

More papers in Bank of Israel Working Papers from Bank of Israel Contact information at EDIRC.
Bibliographic data for series maintained by Yossi Yakhin ().