As the country's fifth consecutive year of economic growth draws to a close, the Ariav Committee this week got down to work on its challenge from Finance Minister Ronnie Bar-On - modernize local capital markets to establish Israel as a global financial center. The committee, named for Finance Ministry Director-General Yarom Ariav, was formed in November to build on the successes achieved by the Bachar reforms in opening up local financial markets and Israel Securities Authority initiatives are playing an essential role in making the global community aware of the ever-growing sophistication of Israel's financial markets. "Now, in a changing reality where the business world today and particularly the financial sector is so globalized, we cannot afford to ignore how we relate to the world," Yael Almog, senior adviser to the chairman and director of the ISA's department of international affairs, told The Jerusalem Post. "That's the main issue today - how we make Israel relevant, how we make the capital market relevant. We cannot be isolated. We have a very, very significant disadvantage in where we are geographically and in our political status, so particularly Israel cannot afford to ignore this issue." The authority has made great strides over the past several years in attracting global attention and calls some of the steps it has taken as "nothing less than revolutionary for the Israeli capital markets." "The ISA, unlike what it did in the past, has put very, very clearly its agenda to promote the capital markets and to align its infrastructure, its products, its systems, its approaches to the international standard," said Almog. "That was composed of many things that were done primarily in regulation and in promoting regulation that will introduce to the Israeli markets more products and more infrastructure for financial products and reforms, and also technological infrastructure. The system of disclosure is based on a very, very developed technological infrastructure. The steps are being taken one by one." Among the changes are the introduction of dual-listings, market makers and instruments such as real estate investment trusts (REITS). It also has signed dozens of consultation and cooperation agreements with countries around the globe - most recently Romania, India and Argentina - and has upgraded reporting standards with the imminent implementations of XBRL, which will allow investors worldwide to read financial reports of Israeli companies in the language of their choice, and IFRS, or international financial reporting standards. And, just this month, France recognized that Israeli prospectus standards can be considered equivalent to its own reporting standards - the first application outside the European Union, which Almog said was an important precedent for relations with Europe. "In terms of perception it means we get an endorsement from the European community on the level of our regulation and the protection of investors and the development of markets. We see it as a very, very important step. First of all a symbolic step, but that's the meaning of global integration." With the international benefits of the opening of the capital markets, come local perks, as well. "A financial sector should be the first growth engine for the other sectors in the country," said Almog. "It has to provide capital and it has to provide services for the business sector to grow. An economy cannot grow without a financial sector that is active, healthy and growing." Meanwhile, these accomplishments have made great strides in addressing some of the concerns the world has about Israel's situation. Almog believes financial services is the right industry to dispel any other worries. "This is an industry that suits the special strengths and weaknesses of Israel because Israel is remote and it has problematic borders. [But] this is an industry that can overcome borders and diplomatic problems. It is very highly based on very highly skilled human resources, and we have that." Almog's boss, outgoing ISA Chairman Moshe Terry, is a member of the Ariav Committee, which also includes Supervisor of Banks Rony Hizkiyahu, Supervisor of Insurance and Savings Yadin Antebi, Deputy Governor of the Bank of Israel Zvi Eckstein and Anti-Trust Commissioner Ronit Kahn, among others. The committee is expected to submit its recommendations to Bar-On by the end of August, 2008. In the meantime, it will brainstorm to find a way to fulfill its challenge from Bar-On. "It's not a far-fetched vision. It's something we think we can do," said Almog. "Just as we became a hi-tech center and R&D center for the high-technology needs of companies around the world, we can be a financial center to the global community."