Damage Report

Israel's stock crash revisited

"The inevitable end of a protracted financial adventure." That was how State Controller Yitzhak Tunik, the government ombudsman, described Israel's bank- stock crash in a harsh report released last week. Tunik's 107-page document concerned the financial turmoil of October 1983, when investors sold off shares of Israel's major banks, forcing the government to shut down the Tel Aviv stock exchange for two weeks. By the time trading resumed, bank stocks had lost a third of their dollar value, and the government had pledged to buy the shares at precrash prices to keep investors from taking a beating. The collapse heightened an...

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