(IsraelNN.com) The Finance Ministry's optimistic talk on the economy fell on deaf ears of investors who continued to dump stocks in the Tel Aviv Stock Exchange on Sunday.

Shortly after 3:00 p.m., the TA 25 had dropped 5.22 percent to 802.96. The TA 100 plummeted 5.57 percent to 718.50, and the Tel-Tech 15 was down 9.14 percent. Real estate stocks also slumped, dropping by 7.54 percent to 225.79. The Finance-15 index was down 5.44 percent to 680.59.

Prime Minister Ehud Olmert met with Bank of Israel Governor Stanley Fischer and Finance Minister Ronnie Bar-On for a "check-up" on the current status of Israel's fiscal health before the weekly Cabinet meeting convened, and at the Kadima faction meeting, Bar-On sought to marshall support for the 2009 budget. "We are cooperating with the Bank of Israel and the banks," he told the Kadima ministers, "and at this time this is no sign of real fear. We must not deviate from our budgetary targets."

The U.S. Senate voted early last week to approve a massive $700 billion bailout plan after the House of Representatives narrowly defeated the measure, which was designed to stem the bleeding in America's financial institutions. By Friday, however, members of Congress had come around and voted to approve the measure as well.  The bill included a provision to raise the ceiling on FDIC insurance for deposits of up to $250,000, as opposed to the previous maximum of $100,000.

Israeli investors, as well as those around the rest of the world, have become increasingly nervous as one American financial institution after the other began to topple. The largest bank failure in U.S. history ended with a squeak late last month when Washington Mutual Bank was absorbed by JP Morgan & Chase. The failure barely two weeks earlier of the venerable Lehman Brothers investment bank, which did not merit a government bailout, did nothing to improve investor confidence.

Official Efforts to Inject Investors with Confidence in Israel

Israel's economic forecast is not as grim as some have predicted in the past several weeks, according to former Finance Ministry director-general Yossi Bachar.

Contrary to other financial experts, Bachar told listeners Sunday morning on Voice of Israel government radio that he sees no reason for people to be worried about their savings in Israeli banks.

"In a period of uncertainty such as this, we need balanced consideration, not to come out with bombastic announcements and not assessments that cause people to take actions they otherwise would not," he said. "We see in the United States, in many places, that the responses are exactly the opposite of what people expect."

Bachar emphasized that the past five years have shown strong economic growth in the Jewish State, a trend he said has resulted in a strong economy that he believes will be more than a match to weather the fiscal storm emanating from shaky world finances.

Bank of Israel Governor Stanley Fischer gave a similar interview on the same radio station one week ago, saying the financial network in Israel "is very, very strong, and especially the banks."