The International Credit Bank was closed today after its board of directors last night asked a Geneva court to decree a payments moratorium. The court is studying the bank’s plea and is not expected to hand down its decision before the end of the month in view of the complexity of the bank’s accounts.
According to Swiss law. the court can impose a moratorium if it finds the bank’s assets sufficient to meet its obligations and that it is suffering from a shortage of funds only due to exceptional circumstances such as a sudden rush by depositors to withdraw their moneys. Should the court find the bank insolvent, however, it will decree it to be in bankruptcy and appoint an official receiver to wind up its business. Until then, the bank is still free to negotiate its sale or the sale of its assets, the funds from which would be deposited in a court controlled account.
In a communique released last night, the bank’s board of directors blamed the crisis on press campaigns waged in West Germany and “other countries.” The communique said the panic withdrawals of funds are responsible for the bank’s lack of available funds.
Sources close to the bank told the Jewish Telegraphic Agency today that the bank’s assets can easily cover all of its deposits and other liabilities. These sources also claimed that several un-named Jewish banks are expressing interest in a takeover bid.
Other financial sources in Geneva said, however, that as far as the Hessische Landesbank Girozentrale could ascertain during last week’s negotiations in Frankfurt, the International Credit Bank’s assets are vastly inferior to its liabilities. These sources expressed the hope that the bank’s future will be rapidly settled one way or another as any delay harms other Jewish or Israeli connected firms in Switzerland and Western Europe.
ATTEMPTS TO WITHDRAW DEPOSITS
The bank’s chairman, Tibor Rosenbaum. was not available for comment in spite of JTA’s repeated attempts to contact him. Rosenbaum also failed to attend the Frankfurt negotiations during which the Hessische Landesbank finally decided to risk losing the funds it has already advanced the International Credit Bank rather than transfer more money to. it. The Hessische Landesbank controlled by the Hesse SPD (Socialist) government, has 36.4 percent interest in the Swiss bank.
Meanwhile, small depositors continued to arrive in Geneva in a vain attempt to withdraw funds deposited with the bank. Last night, after the bank announced its temporary closure, people, many from Israel and France, waited for hours in front of the locked gates. Several people said that they had come from Paris, others from Tel Aviv to try to recover their deposits. Last night there was no one left at the bank with whom they could talk. The staff had left earlier through a side door and the only people in the lobby were the guards.
The Archive of the Jewish Telegraphic Agency includes articles published from 1923 to 2008. Archive stories reflect the journalistic standards and practices of the time they were published.
