Israeli rejects BAILOUT: Opts to let market forces reign
PM Olmert rejects bailout plan as Tel Aviv opens Sunday with heavy losses
October 12, 2008, 11:48 AM (GMT+02:00)
Tel Aviv Stock Exchange opens late
Industry minister Yishai proposed a $10bn dollar bailout plan for Israeli banks and the creation of a new emergency economic cabinet to handle the financial crisis on which opposition leader Binyamin Netanyahu, former finance minister and PM, would have a seat.The plan would also protect depositors and savers. Caretaker prime minister Ehud Olmert rejected the proposal out of hand.
The weekly cabinet session took place Sunday, Oct. 12, in the shadow of heavy losses on the Tel Aviv Stock exchange, which opened 45 minutes late after a five-day festival break during which global markets crashed.
The Tel Aviv market reopened in the face of intense pressure to to keep it shut the exchange until after the High Holidays which end Oct. 22, to avoid global fallout. Anyway, the Israeli market is closed for Succot, Monday and Tuesday, Oct. 13-14. Trading is automatically suspended if prices fall below the 12 percent level.
Saturday night, Oct. 11, International Monetary Fund directors warned of a global economic meltdown unless urgent measures are put in place. They went on air with their warning after the seven rich nations’ financial leaders meeting at the White House in Washington failed to agree on a package to revive inter-bank lending and so rescue the markets from free fall. Euro zone leaders meet in Paris Sunday to find a way out of the crisis. The IMF director Dominique Strauss-Kahn admitted Saturday night that the bailout plans and interest rate cuts approved in the last 10 days had failed to restore confidence in world markets.
The UK government is preparing to partly nationalize troubled major banks including the Royal Bank of Scotland, Lloyds TSB and HBOS. Government officials will sit on their boards of directors to oversee the disposition of multi-billion pound injections.