A senior Bank of Israel official told "Globes" that there is no credit crunch at the banks and there was even an increase in credit in the banking system.
The official accused certain special interests of sowing panic, which did not reflect economic reality. He said that while banks had tightened credit terms, this was for reasons of prudence, not because of a system-wide credit crunch.
Yesterday, Bank Hapoalim (TASE: POLI; LSE:80OA) president and CEO Zvi Ziv said that the government should intervene in the capital market. At the at the Prime Minister's Conference for Export and International Cooperation, he said, "Every minute that passes leaves Israel's long-term savers in an economic crisis from which they cannot emerge on their own. Every day that the government does nothing increases the damage to the economy."
Governor of the Bank of Israel Prof. Stanley Fischer said that there was no need for intervention. "The fact that a company obtained credit in better times does not require intervention by the authorities to help it today, in less good times," he said. "As long as the market functions properly, as is the case today, intervention is not desirable."
Investors are not so sanguine, however, and the Tel Aviv Stock Exchange (TASE) tumbled to a three-year low today. The falls on the TASE followed losses in Asian markets, even while European markets were mixed.
Published by Globes [online], Israel business news - www.globes-online.com - on November 13, 2008
© Copyright of Globes Publisher Itonut (1983) Ltd. 2008