Local banks reveal WaMu exposure

Fischer expresses confidence in the ability of local financial institutions to weather the global crisis.

September 28, 2008 23:03
1 minute read.
Stanley Fischer good

Stn Fischer good 88 248. (photo credit: Ariel Jerozolimski)


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Among local banks, Bank Leumi suffered the largest exposure to the collapse of Washington Mutual, close to $50 million. "At this early stage, it is difficult to estimate the scope of such damage as may be caused to the Leumi Group as a result of the said exposure," the bank said in a statement Sunday. Leumi reported that it held $27m. in debentures issued by Washington Mutual Bank, and $23m. in bonds and credit derivatives, specifically credit default swaps, issued by the parent company, Washington Mutual Inc. Bank Hapoalim is estimated to have an exposure of $25m. and Israel Discount Bank $12m. US regulators on Thursday decided to sell Washington Mutual's assets to JPMorgan Chase & Co for $1.9 billion. Bank of Israel Governor Stanley Fischer on Sunday expressed confidence in the ability of local financial institutions to weather the global financial crisis. "There is not one bank in Israel which is poised to collapse," he told Israel Radio. "We are in direct contact with the banks on a daily basis. To our knowledge, the banks are in a good state to cope with the damage of the latest financial crisis, and we will be ready to take action should it be necessary." Earlier this month, four of Israel's five biggest banks reported they collectively have at least $266m. in assets at risk because of the Lehman Brothers failure. The Finance Ministry and the Bank of Israel announced this month that a joint team was being formed to monitor and assess the global financial situation and its impact on the local market and economy.

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