More than $4 billion were wiped out on the Tel Aviv stock market this week in what was described as a psychological — rather than an economic — phenomenon.
It is widely believed that the panic and crisis in confidence that was so spectacularly evident Wednesday and Thursday were a response to a wave of arrests and investigations of senior bank officials, notably those of the Discount Bank.
Earlier this week, two senior Discount Bank officials and the portfolio manager of the Central Securities Corp. were remanded on bail. They are suspected of fraudulently manipulating shares and of giving and taking bribes in a series of business deals affecting the shares of 13 companies over the past year.
The companies, some formerly regarded as blue-chip stocks, include Tadiran, Osem and the Dead Sea Industries.
The market fell across the board as small investors began to sell heavily amid rumors of further arrests of senior banking staff on suspicion of fraudulent dealing.
Ten years ago, Israel was shaken by a bankshares crisis. The recommendations of the judicial committee of inquiry set up to investigate the scandal have largely been ignored.
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.
