Souk Al-Manakh Crippled Kuwait's Banks

Kuwait's unofficial Souk Al-Manakh stock market grew so large that its capitalization trailed only the United States and Japan. Operating from an air-conditioned parking garage in Kuwait City, traders used postdated checks to finance speculation in largely unregulated non-Kuwaiti companies. In August 1982, a dealer presented one such check for payment, but it bounced and triggered the collapse. Investigators later counted $94 billion in worthless checks from about 6,000 investors, while the debts left every Kuwaiti bank except the National Bank of Kuwait technically insolvent and pushed the country into recession.

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