Bank of Israel chief holds emergency talks over global financial crisis
Stanley Fischer calls meeting to examine impact of global crisis; T.A. index drops 6.8% in two days.
Bank of Israel Governor Stanley Fischer hastily invited the heads of the country's banks to a meeting Wednesday morning to examine their exposure to the world financial crisis and ask how they will deal with the problem.
The crisis continued to drag down world markets on Tuesday - in two days more than $1 trillion in value has been wiped out.
The Tel Aviv Stock Exchange's TA-100 index of the 100 largest public companies fell 1.2 percent on Tuesday, seeing a drop of 6.8 percent over the last two days. Bank stocks as well as companies controlled by Israel's biggest tycoons bore the brunt of the losses.
The financial crisis - the largest since the Great Depression began in 1929 - started on Monday with the bankruptcy of U.S. investment bank Lehman Brothers and continued with expectations of the collapse of insurance giant AIG.
Stock markets showed steep losses on Tuesday around the world, with Moscow plunging 11.5 percent. Hong Kong shares fell 5.4 percent, while Seoul dropped 6.1 percent and London 3.4 percent.
Wall Street ended another tumultuous session with a sizable gain on Tuesday, partly recovering from its worst sell-off in years after the Federal Reserve said it was keeping interest rates steady.
Fischer invited the bank heads to Wednesday's meeting on very little notice. Supervisor of Banks Rony Hizkiyahu will take part. Fischer will ask the banks if they foresee any problems in dealing with the crisis. The banks and the Bank of Israel will try to formulate their plans for the next few days, both for the overall banking system and each institution individually, until the implications of the U.S. woes become clearer.