Bank of Israel, treasury may intervene in markets

Bank of Israel Governor Stanley Fischer and Finance Minister Roni Bar-On discussed on Friday directly injecting capital into Israel's banks in order to reduce the effects of the credit crisis. The pair decided to watch economic developments in Israel and around the world over the next few days before deciding.

The treasury has reiterated its stand that it will not levy new taxes, though it will also not cut spending next year.

The central bank and treasury are also developing a plan over fears that the public will flee provident funds and other long-term investments.

The Tel Aviv Stock Exchange will open trading this morning after being closed since last Monday - having taken five days off due to the Yom Kippur holiday and the weekend - and traders are expected to react to a 18% drop in the Dow Jones over those same five days by pushing the TASE down, too.

Last week was the worst week on Wall Street in the 112 years the Dow Jones index has existed, and world markets also fell about 20%.

In Washington, the International Monetary Fund warned yesterday that the global financial system was on the brink of meltdown, while France and Germany pushed ahead with a pan-European crisis response. The U.S. called for patience, but the IMF stressed that time was running short.