Israel unveils new plan against financial crisis

Special Report:Global Financial Crisis　

JERUSALEM, Nov. 25 (Chinese media) -- Israeli Finance Ministry unveiled on Tuesday a new plan to provide 11 billion New Israeli Shekel (NIS)(2.75 billion U.S. dollars) to banks and pension funds to combat the impact of the global crisis on Israel's economy.

The plan will be implemented in four steps, according the website of local daily Jerusalem Post:

Firstly, a state guarantee of 6-billion-NIS designed to mobilize banking funds for credit and lending needs.

Secondly, the provision of a 5-billion-NIS capital fund to protect pension funds and bolster the external credit market.

Thirdly, the establishment of a system to assist bond holders in reaching debt repayment arrangements with bonds issuers.

Fourthly, the passing of new legislation which would encourage and facilitate foreign investment.

Israeli Finance Ministry said that the purpose of the plan was to repair flaws in the economy and extend credit reserves in the wake of the crisis.

On Monday, Bank of Israel Governor Stanley Fischer responded to the crisis by lowering the bank's key lending rate to its lowest level ever - 2.5 percent. This will make borrowing cheaper, and thereby hopefully encourage economic activity.(One dollar=3.99 NIS)