US official conveys concerns around threat to cut ties between Israeli, Palestinian banks
Date
9/24/2024 3:16:52 AM
(MENAFN) On Monday, the US Deputy Treasury Secretary conveyed Washington’s concerns to the Governor of the Bank of Israel regarding potential threats to sever correspondent banking relationships between Israeli and Palestinian banks. These connections are critical for the functioning of the financial systems in both regions, and there is growing unease in the US over any moves that could disrupt these ties.
In a statement issued by the Treasury Department, it was noted that the Deputy Secretary expressed the US government’s deep concern about threats from certain figures within the Israeli government to terminate these banking relations. He emphasized the importance of maintaining these connections, urging that they should be extended for at least another year to avoid negative financial consequences. The ongoing correspondent banking relationships are seen as crucial for the economic stability and cooperation between Israel and the Palestinian territories.
The Deputy Secretary also discussed regional economic issues with Jordan's King Abdullah II, particularly focusing on the need to preserve economic stability in the West Bank. With the West Bank's economy already fragile, there is significant concern that cutting off banking ties would exacerbate the situation, leading to widespread instability. The US is working to ensure that Israel's financial policies toward the Palestinian territories do not lead to further deterioration of the region's economy.
A report from Axios earlier this week highlighted that the US is particularly worried about Israeli Finance Minister Bezalel Smotrich’s potential move to sever the financial link between Palestinian and Israeli banks next month. Such an action, the report warned, could trigger a "comprehensive economic collapse" in the West Bank, significantly undermining the financial infrastructure and further escalating tensions in the region. Washington is closely monitoring these developments, pushing for a diplomatic resolution to avoid such a dire outcome.
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