Former Regulator Warns of Real Risks from Social Media Rumors in Bank of Jerusalem Stock Turmoil

The Bank of Jerusalem's stock experienced significant volatility following rumors related to the bank employee Mali Yahelomi, who, along with Liel Yahelomi, was located in Argentina. Police investigations found no criminal suspicions, confirming the two left voluntarily and likely planned their departure in advance. Despite the absence of wrongdoing, the rumors surrounding Mali Yahelomi's work at the bank caused a sharp market reaction.

Former banking supervisor Yair Avidan emphasized the critical role of trust in such events, noting that misinformation can spread faster than money and quickly escalate from reputational damage to liquidity risks, threatening business continuity. He highlighted that the Israeli banking system has historically demonstrated stability during major crises like the 2008 financial crash and the COVID-19 pandemic, allowing citizens to maintain confidence in their financial security.

However, Avidan stressed that banks must now broaden their risk management frameworks to include rapid responses to social media crises, as digital reputation risks can trigger other vulnerabilities. He also pointed to the importance of reviewing internal controls and employee permissions, especially with the growing use of artificial intelligence, to strengthen weak links in operational security.

Avidan concluded that the lessons from this incident extend beyond banking, urging all industries to prepare for scenarios where online rumors can swiftly become significant business threats. He underscored the necessity of timely communication to prevent information vacuums that exacerbate crises.