HSBC predicts Israeli shekel will suffer if judicial reform passes - report

The Hongkong and Shanghai Banking Corporation (HSBC), published a report on Monday discussing the state of the New Israeli Shekel and the possible effects Israel's prospective judicial reform will have on the international viability of its currency, according to Israeli media. 

HSBC made it clear, according to N12, that the shekel is expected to get stronger but that legal reform could stifle this growth.

HSBC joins JP Morgan and Barclays

The multinational British-owned bank is the largest in Europe. It has joined the ranks of Barclays and JP Morgan in issuing warnings that, should Israel go through with the proposed judicial reforms, there would be severe economic consequences. 

“Israel’s local markets have seen a flare-up in idiosyncratic risk as increased geopolitical tensions were added to investor concerns over plans for judicial reforms,” read the Friday report released by American multinational banking corporation JP Morgan Chase & Co.

London-based Barclays bank also a statement on market volatility in Israel due to the government's legislation plans on Friday, saying: "Since the elections in Israel, political uncertainty has prevailed and this has resulted in underperformance in several of the economic indices in Israel. The recent events regarding the controversial judicial reform and the rise in regional tensions have added pressure to all this albeit in a limited way."

Assaf Gilead/GLOBES/TNS contributed to this report.

Zachy Hennessey contributed to this report.

This is a developing story.