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ABSTRACT
This article seeks to further understanding of the primary role of trust repair after the Israeli banks crisis of 1983. Israel provides dramatic example of a country that experienced a severe banking crisis. Through the lens of qualitative historical analysis, the article analyses trust transgression of the Israeli banks crisis, as well as trust repair strategies. The analysis reveals a severe trust crisis in the banking sector characterised by integrity violations and deceptions. Lessons from the analysis are valuable to understand the importance of timely, transparent, and consistent intervention after a crisis.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Notes
1. Ahmed and Ibrahim, “Financial Consumer Protection Regime.”
2. Mourouzidou-Damtsa et al., “National Culture and Bank.”
3. Monferrer-Tirado et al., “Service Quality in Bank”; and Sapienza and Zingales, “A Trust Crisis.”
4. Garriga, “Regulatory Lags, Liberalization, and Vulnerability.”
5. Moschella and Tsingou, “Regulating Finance after the Crisis.”
6. Bozic et al., “A strategic Action Fields Perspective.”
7. Bozic, “Consumer Trust Repair”; and Stevens et al, “Reorienting and Recalibrating Inter-Organizational Relationships.”
8. Spicer and Okhmatovskiy, “Multiple Paths to Institutional-Based Trust Production”; and Sigurjonsson et al., “The Return of Trust?”
9. See note 7 above.
10. “Bank of Israel Survey 1984.” https://www.boi.org.il/he/Research/DocLib2/%D7%A1%D7%A7%D7%A8%2058/surv58_6.pdf; OECD, “Trust in Government, Policy Effectiveness”; and “World Values Survey 1999–2004.” https://www.worldvaluessurvey.org/WVSDocumentationWV4.jsp.
11. Bachmann et al., “Trust in Crisis,” 285.
12. Gillespie and Dietz, “Trust Repair after an Organization-Level Failure.”
13. de Jager, “A Question of Trust.”
14. Kumra and Mittal, “Trust and Its Determinants in Internet Banking.”
15. Alford and Sherrell, “The Role of Affect in Consumer Satisfaction.”
16. Gundlach and Cannon, “Trust but Verify.”
17. van de Walle and Six, “Trust and Distrust as Distinct Concepts.”
18. Gillespie and Hurley, “Trust and the Global Financial Crisis,” 5.
19. Nienaber et al., “Do We Bank on Regulation or Reputation?”
20. Gillespie et al., “Restoring Institutional Trust after the Global Financial Crisis.”
21. Ibid.
22. Bozic, “Consumer Trust Repair,” 539.
23. Bachmann et al., “Repairing Trust in Organizations and Institutions”; and Siebert et al., “Organizational Recidivism and Trust Repair.”
24. See note 12 above.
25. Gillespie et al., “Restoring Institutional Trust after the Global Financial Crisis,” 208.
26. Ibid.
27. Gillespie and Dietz, “Trust Repair after an Organization-Level Failure,” 133–34.
28. Shapiro, “The Social Control of Impersonal Trust.”
29. See note 19 above.
30. Dirks et al., “Understanding the Effects of Substantive Responses on Trust.”
31. See note 19 above.
32. Mohammed Ahmed, “A Conceptual Framework for the Basel Accords-Based Regulation.”
33. See note 12 above.
34. Hancock and Algozzine, Doing Case Study Research, 31.
35. See note 12 above.
36. Hancock and Algozzine, Doing Case Study Research.
37. Yin, Case Study Research.
38. Dibb and Meadows, “The Application of a Relationship Marketing.”
39. See note 37 above.
40. Siggelkow, “Persuasion with Case Studies.”
41. Prager, “Banking Privatization in Israel.”
42. Bank of Israel, Bank Israel Report for 1983.
43. Beisky Committee, Report of the Investigative Committee.
44. Kedar-Levi, A Critical History of Financial Crises.
45. See note 43 above.
46. See note 42 above.
47. Blass and Grossman, The 1983 Israel Bank Shares Crisis Revisited.
48. State Comptroller of Israel, Bank shares – The October 1983 Crisis.
49. See note 43 above.
50. Criminal Record 524/90 The state of Israel against the national bank and other.
51. Schwartz and Sulitzeanu-Kenan, “Managerial Values and Accountability Pressures.”
52. Zalika and Zur-Nyberg, “Bank Share Crisis.”
53. See note 12 above.
54. See note 20 above.
55. Burns and Scapens, “Conceptualizing Management Accounting Change.”
56. See note 44 above.
57. Admati and Hellwig, The Bankers’ New Clothes.
58. Cohn et al., “Business Culture and Dishonesty,” 68; and De Vries and Vardi, “The Bank‐Shares Regulation Affair.”
59. Gillespie and Hurley, “Trust and the Global Financial Crisis.”
60. See note 32 above.
61. Möllering, “The Trust/Control Duality.”
62. See note 28 above.
63. Möllering, Trust.
64. See note 48 above.
65. See note 41 above.
66. See note 12 above.
67. See note 13 above.
68. Li et al., “Bank Regulation, Financial Crisis.”
69. See note 12 above.
70. Bachar Committee, Report of the Inter-Ministerial Committee.
71. See note 41 above.
72. See note 44 above.
73. Möllering, “Process Views of Trusting and Crises.”
74. Poppo and Schepker, “Repairing Public Trust in Organizations”; and Seeger, “Best Practices in Crisis Communication.”
75. Langley, “Strategies for Theorizing from Process Data.”
76. See note 73 above.
77. Bozic, “Consumer Trust Repair,” 544.
78. Järvinen, Service Channel Relationships.
79. See note 32 above.
80. Kramer and Lewicki, “Repairing and Enhancing Trust,” 268–269.
81. See note 32 above.
82. Diamond, Collapse.
83. Kramer and Lewicki, “Repairing and Enhancing Trust.”
84. Johnson, Research Methods in Educational Management.
85. Giannetti, “Financial Liberalization and Banking Crises.”
Additional information
Notes on contributors
Aviv Kidron
Aviv Kidron is Head of the MA Studies in Organizational Development and Consulting, Department of Human Services, The Max Stern Yezreel Valley College, Israel.
Yvonne Kreis
Yvonne Kreis is Senior Consultant with Schüllermann und Partner AG, Mainz, Germany.