jerusalem feb 14 reuters  sharp declines in financial asset prices higher inflation and a new significant wave covid19 infections pose the greatest risks to the global economy the bank of israel said on monday in its twice yearly financial stability report and although israeli banks and insurance companies maintained stability in the second half of 2021 with strong capital ratios that could be derailed should financial asset prices fall further the report said israeli stock prices have dipped 11 so far this year on the heels of global declines after a 31 rise in 2021 the central bank said that as financial asset prices in israel continued to increase in 2021 pricing indices show that the gap between financial asset prices and corporate profits is greater than in the past the report did not raise concern over rising real estate and financial asset prices and in business and household debt in israel where the inflation rate stands at only 28 well below the united states and some european countries the quality of total household credit is better than during the precrisis period it said it noted that new mortgages taken out in 2021 were historically high and as of november payment had yet to resume in full on some 9 of mortgages that were deferred during the covid19 pandemic mainly in 2020 at the same time nonhousing debt rebounded moderately in 2021 with growth accelerating in recent months payment on 1 of nonhousing credit that was deferred had yet to resume after a weak 2020 israeli banks have recovered well from the crisis posting sharp gains in profit over the first three quarters of 2021 amid the unwinding of provisions made last year to protect against loan defaults israels banking regulator has as a result agreed to allow banks to resume regular divided payouts in 2022 read more