U.S. Deputy Treasury Secretary Urges Israel to Extend Palestinian Banking Ties

U.S. Deputy Treasury Secretary Wally Adeyemo has urged Israel to maintain its banking relationships with Palestinian banks for at least another year to mitigate potential economic and security crises in the West Bank. This plea comes amidst threats from Israeli officials to cut off these critical ties, affecting $10 billion in transactions.

U.S. Deputy Treasury Secretary Wally Adeyemo has called on Israel to extend its banking relationships with Palestinian banks for a minimum of one year to prevent an economic crisis in the West Bank and bolster Israel's security. Adeyemo stressed the urgency in a meeting with Bank of Israel Governor Amir Yaron in New York during the United Nations General Assembly.

The U.S. Treasury Department expressed concerns about threats from some Israeli officials, including Finance Minister Bezalel Smotrich, to sever banking relationships with Palestinian banks. The potential cutoff could destabilize the Palestinian Authority and, by extension, Israel's security. The current banking correspondence authorization expires on October 31, putting nearly $10 billion in export and import transactions at risk.

Adeyemo relayed similar concerns to Jordan's King Abdullah, highlighting the risk of regional instability and the potential for more unregulated Palestinian financial transactions, which would endanger both Israeli and regional security. The World Bank has warned that the Palestinian territories are on the verge of economic collapse, with significant GDP declines and financing gaps threatening systemic failure.

(With inputs from agencies.)