Israeli Court Orders Probe of ’83 Stock Crash Be Reopened
Israel’s Supreme Court today ordered the state attorney general to reopen an investigation into whether criminal charges should be lodged against the nation’s leading banks and former directors for a stock market crash in 1983.
The ruling threatens to shake up Israel’s banking system, which already is burdened by 20% annual inflation and economic recession.
Up to 26 banks, directors and accountants could be put on trial for violating state banking regulations, the national Itim news agency reported.
These include eight major institutions: Bank Leumi, Bank Hapoalim, Israel Discount Bank and its holding company IDB, Union Bank, Bank Mizrahi, Israel General Bank and the Bank for Trade and Funding.
The market collapse of October, 1983, was one of Israel’s worst economic disasters, forcing the government to underwrite hundreds of millions of dollars in public losses that are still being paid off.
Israel radio estimated the bailout cost $8 billion.
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