 ASSESSING DAMAGES: THE 1983 ISRAELI BANK SHARES CRISISAsher Blass () and Grossman Rs Contemporary Economic Policy, 2001, vol. 19, issue 1, 49-58 Abstract: In 1983, Israeli bank shares collapsed following several years during which the banks had actively intervened to promote share prices and thereby contributed to a 300% rise in real terms. During the crisis the government assumed control of the banks, which they did not begin to sell back to the public until 1993. We compare 1993 bank share prices after the banks were partially relisted on the Stock Exchange with 1983 precrisis values. The 1993 time‐adjusted market values were $10 billion lower than in 1983, a decline borne by precrisis shareholders ($4 billion) and by taxpayers ($6 billion). Of this latter amount, two‐thirds represents a transfer from the government to shareholders, while approximately one‐third represents an efficiency loss ‐ and hence a direct cost ‐ resulting from government ownership of the banks for 10 years following the crisis. The results highlight the risk inherent in a banking system that is both concentrated and universal and illustrates the costs associated with sustained government ownership. Date: 2001 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:coecpo:v:19:y:2001:i:1:p:49-58 Ordering information: This journal article can be ordered from Access Statistics for this article Contemporary Economic Policy is currently edited by Brad R. Humphreys More articles in Contemporary Economic Policy from Western Economic Association International Contact information at EDIRC. |
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