Souk Al-Manakh Crash Crippled Kuwait

By 1982, Kuwait's unofficial Souk Al-Manakh had grown into the world's third-largest stock market by capitalization, trailing only the United States and Japan. Traders inflated it with postdated checks until one check from a young Passport Office employee bounced in August 1982 and exposed the system. Investigators found $94 billion in worthless checks tied to about 6,000 investors, leaving every Kuwaiti bank except the National Bank of Kuwait technically insolvent. Central bank support prevented mass bankruptcy, but the crash and falling oil revenues pushed Kuwait and the wider Gulf into recession.

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