Worst of economic crisis behind Israel: central bank chief

• Source: Xinhua
• [10:01 July 03 2009]
• Comments

Record gains in the financial markets are a sign that Israel has braved the roughest stretch of the economic downturn, Bank of Israel Governor Stanley Fischer said on Thursday.

"We've passed the worst point of the global financial crisis, which was at the end of 2008 and the beginning of 2009," Fischer was quoted by local daily Ha'aretz as telling an economic conference in Eilat in southern Israel, noting that "the second quarter was the best quarter for the stock markets in the last 20 years."

"When economic history will be written, people will say that this was the most serious case of economic panic since the Second World War, and in terms of the financial markets this was more complicated and more dangerous than that which transpired in the 1930s," said the central bank chief.

This is because the financial system is much more complex today than it was back then, explained Fischer.

The Bank of Israel governor said he was impressed with the large amounts of money that the US government pumped into the market, adding that "they revived the markets which ceased to function."

However, Fischer noted that the actual crisis will continue.

"In the United States, the unemployment rate has reached 9.6 percent and they expect that it will reach more than 10 percent -- these are grave figures but they are very far from the lowest ebb in the 1930s, when there was a rate of 25 percent, something that is simply impossible to imagine today," said the central bank chief.

"It will continue, and we are still unable to say that we have passed the turning point from a practical view. That will happen in the second half of 2009 or the first quarter of 2010," Fischer predicted.