The current banking correspondence authorization is set to expire on October 31, posing risks to nearly $10 billion in import and export transactions….reports Asian Lite News
U.S. Deputy Treasury Secretary Wally Adeyemo has urged Israel to maintain its banking relationships with Palestinian banks for at least another year to prevent an economic crisis in the West Bank, emphasizing that Israel’s security is at stake. Adeyemo conveyed this message during a meeting with Bank of Israel Governor Amir Yaron in New York, coinciding with the United Nations General Assembly. He also met separately with Jordan’s King Abdullah.
The Treasury Department highlighted that Adeyemo expressed concerns over threats from some Israeli officials, including Finance Minister Bezalel Smotrich, to sever correspondent banking ties with Palestinian banks. This relationship is crucial for the Palestinian Authority’s stability, which, if compromised, could negatively impact Israel’s own security.
The current banking correspondence authorization is set to expire on October 31, posing risks to nearly $10 billion in import and export transactions. Adeyemo warned that cutting off these banking ties could push more Palestinian financial activities into unregulated sectors, escalating regional instability.
The World Bank recently indicated that the Palestinian territories are nearing an economic collapse, with Gaza’s GDP plummeting 86% in the first quarter of 2024, and the Palestinian Authority facing a $1.86 billion financing gap for the year. Although Smotrich extended a waiver for banking cooperation for just four months, U.S. officials have remained non-committal about potential repercussions if Israel does not extend this waiver further, leaving open the possibility of sanctions for non-compliance.
