Israel oligarch illiquidity to threaten Israel economy?
Source: http://israelnewsletter.com/2009/03/26/israel-oligarch-illiquidity-to-threaten-israel-economy/Posted on Thursday, March 26th, 2009 | In Israel
Israel’s economy is dominated by fantastic wealth in the hands of a few families. During times of prosperity, these families have used the Israeli banking sector as a form of personal piggy bank to finance expansionary business activities. This has worked out well for the oligarchs and for the banking sector. These tycoon families have had ample capital to grow out their wealth and the banks have had very big, captive customers.
But what happens if these Israeli investors suffer from the same global malaise from which all markets and investors are suffering? Will Israeli oligarchs require a government buyout?
Well, Supervisor of Israel Capital Markets, Insurance and Savings Yadin Anteb, doesn’t think there is a crisis. When questioned this morning about the government stepping in to help bailout billionaires like Shari Arison who recently put her world-class yacht, My Shanti, up on the auction block for an estimated $100m:
If a company takes a loan and does not repay it, its other assets should be seized; it definitely shouldn’t get government aid…There’s no reason to inject money to save an Israeli tycoon. I don’t think that there’s any reason to do this. The pressure of the tycoons’ companies it transferred to the lenders.
When asked about Bank Hapoalim controlling shareholder Shari Arison putting up her yacht for sale for $100 million, [Bank HaPoalim chairman] Dankner replied, “To the best of my knowledge, Arison has no liquidity problem.”
Well, the lenders here are core Israeli institutions. We’ll see what the government says when a large Israeli bank comes crying and the ship has already left port.
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 About Zack Miller (http://israelnewsletter.com)
Zack embodies the nexus between asset management, equity research, and new internet distribution technologies. Previously, Zack was an analyst at Oasis Capital Management, a multinational, multi-strategy hedge fund. Zack’s area of expertise is discovering and analyzing undervalued technology stocks, particularly of small-cap companies. Zack holds an MBA from the Kellogg School of Management and a B.A. from Harvard University. |
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