US Treasury Secretary, Janet Yellen, said on Thursday she was concerned by a threat from Israel to cut off Palestinian banks from their Israeli correspondent banks, a move that would close a critical lifeline for the Palestinian economy, Reuters reports (21 May 2023). Yellen told a news conference ahead of a G7 finance ministers meeting beginning on Friday that the US and its partners “need to do everything possible to increase humanitarian assistance to Palestinians in Gaza, to curtail violence in the West Bank, and to stabilise the West Bank’s economy”.
She said she would bring up the issue at the meeting of the Group of Seven industrial democracies in the lakeside resort town of Stresa in northern Italy. “I expect other countries to express concern about the impact of such a decision on the West Bank economy. I think this would have a very adverse effect also on Israel. These banking channels are critical for processing transactions that enable almost $8 billion a year in imports from Israel, including electricity, water, fuel, and food, as well as facilitating almost $2 billion a year in exports on which Palestinian livelihoods depend,” Yellen said.
She added that Israel’s withholding of revenues collected on behalf of the Palestinian authority also threatens the West Bank’s economic stability. “My team and I have also engaged directly with the Israeli government to urge action that would bolster the Palestinian economy and, I believe, Israel’s own security.”