The research explores the potential of municipal bonds as a strategic financial tool for the Municipality of Jerusalem, with a broader focus on the benefits from development of Israel’s corporate bond market. Key stakeholders such as the Eden Economic Development Company in Jerusalem, IBI Underwriting, the Israel Competition Authority, and Keystone Fund were engaged to provide invaluable insights into the challenges and opportunities associated with introducing municipal bonds into Israel’s financial landscape.

The research delves into the historical context of bond issuance in Israel, the current state of the municipal and corporate bond markets, and the regulatory environment that governs them. The study highlights how Jerusalem could leverage municipal bonds to finance its long-term growth and infrastructure projects, reducing its reliance on traditional bank loans and supplemental government transfers. The findings emphasize the critical role that a well-regulated bond market could play as a viable alternative for municipal financing, contributing significantly to the city’s economic stability and growth.

This research builds on a renewed focus on establishing a well-regulated and competitive municipal bond market, as outlined in Resolution No. 1308 on January 14, 2024. This resolution sought to enhance competition in the credit market, expand credit availability, and diversify investment opportunities – attracting new investors and introducing new credit products.