The Bank of Israel has earmarked the supervision of banks as one of its main objectives for 2007, as revealed in its annual work plan, which was made available to the public for the first time on Sunday. "As part of the Bank of Israel's policy of transparency, and further to the publication of the bank's budget last week, the bank is publishing for the first time its work plan. This will be the annual practice of the bank henceforth," the central bank stated. Last week the central bank said its total expenditure budget would be NIS 633 million in 2007, down from NIS 669m. in 2006, driven largely by wage costs that were expected to be NIS 22m. below last year's levels. The Bank of Israel Work Plan for 2007 sets out as the key function of the central bank, the focus on the supervision of banks. Among its objectives, it said, are the encouragement of competition in the banking system, improvement of the financial system's ability to operate in emergency situations and preparation of adjustment to Basel II requirements. "The Basel II directives refer to the adoption of international standards for banking supervision. In the framework of the implementation, the banking management, operation and control systems will be upgraded," said the Bank of Israel. "In addition, the banks' reporting system will be upgraded as will disclosure to clients, according to the third stage of the Basel II directives." In its role as the economic adviser to the government, the central bank is seeking in 2007 to increase its services to the government through improving information infrastructure behind decisions, analysis of cost effectiveness of policy alternatives and proposal of reforms. Other objectives this year include the upgrading of Israel's payment and clearing system to international standards with the implementation of the Real Time Gross Settlement (RTGS) system, improvement of monetary policy management and support of stability and efficiency of the financial system. In addition, the central bank is this year planning to conduct a general risk survey, in an effort to develop tools for managing and monitoring risks. The survey will be used as a base for internal audit work on the level of exposure to risk and to implement audit improvements following recommendations that will result from the risk surveys, including the adoption of a risk monitoring system. Among the major projects set out by the Bank of Israel is the restructuring of the central bank, which will see the elimination of some 10 percent of the bank's work force, adoption of a new Bank of Israel Law, the reorganization of statistical data and integration of the bank's internal organizational and management computer systems.