Bank Hapoalim Sees Israeli Credit-Crunch Lasting Into 2010
Written by: Aaron Katsman | January 19, 2009
Bad news for those needing credit from Israeli banks in 2009. According to a report in Globes: “Ziv expects that there will be a credit crisis in the Israeli economy during the coming year. “The answer to whether the banking system can cope with the demand for credit in 2009 is no. Even if we wanted to, we couldn’t supply all the demand for credit. We would be required to examine carefully the risks that we are taking upon ourselves in customer credit portfolios, in Israel and abroad, and use cautious judgment, and go back over and recheck every credit decision. In fact this is a vital condition for getting through the crisis in the best possible way.”
He continued, “No real recovery is expected in 2009. In the best case scenario, we will begin to see the first buds of an improvement only during 2010, and perhaps even later.”
Much like in the US, the question is how to get the banks to start lending money. Clearly just lowering interest rates is not the solution. The banks need to see the economic benefit of opening up credit lines. Without opening up credit lines, existing companies are going to be squeezed, and entrepreneurs looking to start a business seem to really be up the creek.
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