Kuwait Souk al-Manakh

About Kuwait Souk al-Manakh

The Souk al-Manakh stock market in Kuwait was an unregulated over the counter market for Gulf shares. Speculators traded postdated checks, creating enormous paper wealth. The market crashed in 1982 when some checks bounced. The crash revealed 94 billion in outstanding checks, far exceeding Kuwaits GDP. Many investors went bankrupt. The Kuwaiti government bailed out affected citizens at enormous cost. The Souk al-Manakh bubble demonstrated the dangers of completely unregulated markets and the use of postdated checks as financial instruments. The crash contributed to Kuwaits later economic difficulties that preceded the 1990 Iraqi invasion.