Banks Face Possible Collapse

Officials warned today that Israel’s banking system may collapse within a couple of days if there is no solution to the strike by 4000 workers of the Israel Discount Bank, now in its third day, which has forced the closing of the bank’s 150 branches through which 20 percent of Israelis do their banking transactions.

Not only is there no solution in sight but workers in other banks are threatening to join the strike. Meanwhile, the non-striking bank workers are supporting the strikers by refusing to accept Discount Bank checks for payment. Many merchants also are refusing to accept such checks. Only larger wholesale firms are accepting the checks.

Bank Leumi, another major bank system, said it would approve Discount Bank checks for payment into accounts of Bank Leumi clients. The government is considering an emergency plan to be implemented if the banking system collapses under accumulation of Discount Bank checks which cannot be covered. The government has made plans to pour cash into the economy to help meet the shortage cause by the bank shutdowns.

A strike organizer declared that the government and the Association of Banks “force us to fight a battle of no retreat.” There were no indications of moves toward any negotiations.

Meanwhile, the strike of Israel’s salaried engineers neared its second weekend with no negotiations and no efforts for talks. The impact of the walkout spread. With the start of the new school year only 10 days away, construction of new classrooms was stalled. New turbines in power stations remained uninstalled. Many other public works were suspended.