Kuwait finally closes 1982 stock market debt
Kuwait is about to close the books on its $20 billion debt resulting from the 1982 stock market crash.
Fearing the collapse of the nations banking system, the government paid $18 billion in debentures and designed a pay back plan for debtors to paid off the remaining $3 billion.
The plan gave debtors until 6 September 2000 to pay off loans either over a 12-year interest-free period or by five annual payments, at which time the bank would cancel 55 to 97 percent of the original debt.
The government would cover the interest and remainder of the debt that comes to approximately $17.9 billion.
Observers say the absence of stock market laws caused stock prices to jump sending investors running to banks for loans to keep up with the share prices.
Preliminary reports from the Central Bank of Kuwait that supervises the plan show that 8,849 debtors have paid off their debt and about 900 debts have been partially paid off.
According to the report, approximately 201 billion Kuwaiti dinars ($663 billion) of the original debt plus interest would be collected by September 6. The bank predicts the total government losses to be about 5.5 billion dinar ($1.6 billion). – (Albawaba-MEBG)