The supervisory system of financial markets in Israel should be reorganized as the country emerges out of the global economic crisis, according to Bank of Israel Governor Stanley Fischer. "We need to rethink and reorganize the supervision and regulation of financial markets in Israel," he said during a roundtable discussion with journalists in Jerusalem on Tuesday. "I don't want to cause trouble to anyone, but I think it is important for the good of the economy to address this issue in the near future - the sooner the better." There was no doubt the worst of the crisis was over, Fischer said, adding: "Can we sit back and relax now? To a certain extent, but we should not exaggerate. Over the next two years we are likely to feel the repercussions of the crisis. We may see companies who are not able to repay debt or interest, but we don't see a danger to the stability of the banks." The Bank of Israel last week announced it would leave October interest rates unchanged at 0.75 percent. In August it became the first central bank to raise interest rates since the global crisis began. "We raised interest rates, but the impact is minor. It is not an 'on-off' switch tool," Fischer said. He indicated that the Bank of Israel would not act like the US Federal Reserve in 2004, which raised rates for 18 consecutive months by 0.25% in a campaign to control inflation. "I didn't want to convey a message that we will raise rates every month," Fischer said, referring to recent forecasts by investment banks. "If you do something, it has more of an impact than talking." Following the central bank's October decision, Goldman Sachs analysts revised their interest-rate forecast for Israel, in a report published Tuesday. They still sees the interest rate reaching what they call a neutral level of 3% by the end of the third quarter of 2010, but the process is now expected to be slower, with no interest-rate hikes over the next few months. The Goldman Sachs report called the Bank of Israel's policy "highly pragmatic and flexible," adding that it was difficult to predict Fischer's moves. The report said the Bank of Israel would continue to intervene in the foreign-currency market to limit the shekel's strength, but regarding interest-rate moves, "a lot depends on data and on inflation expectations." Before the rate hike, Fischer had been pushing an aggressive expansionary monetary policy, cutting interest rates to record lows to catalyze economic activity amid the global crisis while keeping an eye on inflation. "I don't see why it is so difficult to exit from an expansionary monetary policy," Fischer said. "I don't see a problem there. Central banks just need to take the decision. For me, this is not the problem." The Bank of Israel has also been buying millions of dollars, boosting the country's foreign-currency reserves to new highs, in an effort to weaken the exchange rate to help exports. In August it ended set purchases of foreign currency, but has continued to buy foreign currency in the event of "unusual movements" in the shekel. "We may see days when we will be happy to have these reserves; they are necessary for emergency situations," Fischer said. "It is our responsibility to be worried all the time and be ready to deal with the unexpected. Our hope is that gradually we will be able to lower foreign-currency intervention, and that in the future, intervention will return to be a case out of the norm." Fischer said there were enough reasons for the dollar to continue to be weak in the near future without having to make a prediction. "The dollar weakness will not continue forever, although we are not likely to get back to levels of euro-dollar exchange rate of 1.2," he said. "Our exchange-rate policy intervention was not targeted to weaken or strengthen the shekel-dollar exchange rate in particular, but was implemented against a basket of currencies we have trade with. For example, the shekel has barely strengthened against the euro." Speaking ahead of his trip to the IMF annual summit in Istanbul next week, Fischer said the lesson learned from the global crisis was the importance and need to make use of monetary and fiscal policy. "Today we can see that an active policy can contribute to save the global economy," he said. "Without the intervention of [US Federal Reserve Chairman] Ben Bernanke, [European Central Bank President] Jean-Claude Trichet or [Bank of England Governor] Mervyn King, we would have not emerged out of the crisis as swiftly." Fischer warned that lessons still needed to be learned, despite emerging signs of an end to the crisis. "I am not worried that we are coming out of the crisis too quickly, but that we won't learn from and deal with all the lessons of the global crisis," he said. Fischer attributed sound economic fundamentals at the outbreak of the crisis for the relative fast emergence of the Israeli economy out of the crisis. "What I believe is the most important lesson I have taken from this crisis is maintaining sound economic fundamentals also in good times, which helped us most," he said.