Dun & Bradstreet Israel chief eats words over fragile banks
Reuven Kuvent's comment regarding possible companies' collapse triggered a firestorm in the financial sector.
Casual turns of phrase can have unfortunate ramifications, as Dun & Bradstreet CEO Reuven Kuvent learned yesterday.
"There is some fear that a bank or financial company will collapse because they lent billions of shekels of credit to shaky companies. Nevertheless, we have no concrete information about any such company about to collapse," Kuvent commented yesterday, triggering a firestorm in the financial sector.
An hour later he hastened to clarify that his "wording had been unfortunate, although one cannot ignore the situation in which investment houses and banks could collapse."
Speaking to managers of some of the largest firms in the country, Kuvent presented Dun & Bradstreet's risk index, indicating that 15% of the companies operating in Israel are at "high risk" of collapse. "A bank or investment house could be found among this group of firms," Kuvent said.
Understood to mean that Dun & Bradstreet knew of a particular bank or investment house on the verge of collapse, Kuvent's comments stirred up a ruckus.
The Bank of Israel was inundated by calls from worried citizens asking for assurances that the bank where their own accounts are managed is not on the verge of collapse, since the banks themselves were unwilling to respond.
An hour later, Kuvent was forced to interrupt a panel lead by Teva chairman Eli Hurvitz to clarify that his comments had been taken out of context.
Standing before the top mangers of the business community, Kuvent admitted: "Dun & Bradstreet has no concrete data about any particular bank or financial institution about to collapse."
Later he clarified that he had intended to express general concerns rather than concrete data.
Commenting on Kuvent's initial statements on the internet and before his later clarification, top people at the Bank of Israel called Kuvent's comments "irresponsible."
"The banking system is stable and there is no concern over the stability of the banks," a senior central bank officer said. "Moreover, the central bank has declared itself willing to assist banks with all of the tools at its disposal, if need be."