Collapse and Controversy
The bank stopped payments on October 14, 1966. The collapse of the bank brought the Lebanese economy to a halt and sent shockwaves throughout the Middle East. Intra Bank accounted for 15% of total bank deposits and 38% of deposits with Lebanese-owned banks.
Many observers questioned why the Lebanese Central Bank, which was established only two and a half years earlier in April 1964 did not provide liquidity to Intra Bank during the run on the bank. Many press commentators believed that this was due to influence from Lebanese politicians and rivals who were unhappy at the influence and power of Palestinian-born Beidas.
The collapse of Intra Bank brought a swathe of new banking regulations for the Lebanese banking sector, although these were not enough to restore faith in the Lebanese banking sector to its pre-Intra levels.
The circumstances which surrounded Intra's fall remain to this day controversial issues. The surprisingly weak support from the Lebanese government and the very public allegations over Charles Helou's role in the affair have been attributed to such issues as Beidas' Palestinian origin and envy over Beidas' almost complete control of the Lebanese economy.
Read more about this topic: Intra Bank
Famous quotes containing the words collapse and/or controversy:
“I confidently predict the collapse of capitalism and the beginning of history. Something will go wrong in the machinery that converts money into money, the banking system will collapse totally, and we will be left having to barter to stay alive. Those who can dig in their garden will have a better chance than the rest. I’ll be all right; I’ve got a few veg.”
—Margaret Drabble (b. 1939)
“Ours was a highly activist administration, with a lot of controversy involved ... but I’m not sure that it would be inconsistent with my own political nature to do it differently if I had it to do all over again.”
—Jimmy Carter (James Earl Carter, Jr.)