Treasury Secretary Yellen Warns Israel Against Cutting Off Palestinian Bank Ties

Treasury Secretary Janet L. Yellen has expressed concern over the potential consequences of Israel cutting off ties between Palestinian and Israeli banks. She warned that such a move could further destabilize the economy of the West Bank, exacerbating the already dire economic conditions faced by Palestinians.

Israel recently made the decision to withhold tax revenue from the Palestinian Authority as a retaliatory measure against three European countries that unilaterally agreed to recognize a Palestinian state. This decision has sparked significant international concern and condemnation.

Global Economic Discussions

Ms. Yellen, along with other top economic officials from the Group of 7 nations, is set to address this matter and the humanitarian situation in Gaza during their summit in Stresa, Italy, which commences on Thursday. The summit is expected to be a crucial platform for deliberating on these pressing issues.

Ms. Yellen emphasized the critical role of banking channels in facilitating transactions, highlighting that they enable $8 billion a year of imports of food, fuel, and electricity from Israel, as well as $2 billion of Palestinian exports. The potential disruption of these channels could have far-reaching consequences for the region’s economy.