{"text":[[{"start":7.55,"text":"The Palestinian economy is “weeks away” from a “full crisis”, the head of the Palestinian central bank has warned, after two Israeli banks said they intended to stop providing crucial services that connected the occupied territories to the wider world. "}],[{"start":22.6,"text":"The lenders, Bank Hapoalim and Israel Discount Bank, are the only Israeli banks to provide correspondent banking services to the Palestinian financial sector, facilitating cross-border payments and the import of essentials such as food, water and electricity."}],[{"start":38.900000000000006,"text":"However, Discount Bank recently notified Palestinian banks that it would cease providing such services from September 1, according to a document seen by the FT, while Bank Hapoalim said it would stop providing such services from October 1."}],[{"start":52.550000000000004,"text":"The move follows years of efforts by Israel’s far-right government to pile pressure on the Palestinian financial sector and economy and to fatally undermine the Palestinian Authority, which administers parts of the occupied West Bank."}],[{"start":65.45,"text":"Yahya Shunnar, head of the Palestine Monetary Authority, said the two Israeli banks processed 51bn NIS ($16.6bn) of transactions each year for Palestinian lenders and the suspension could cause shortages of fuel, energy, medicine and food, as well as supply chain disruptions and hits to banks’ financial positions."}],[{"start":85.75,"text":"“[The situation] is now only weeks away from becoming a full crisis, one whose consequences will reach well beyond the banking sector . . . Nearly every part of economic and daily life is at stake,” he said."}],[{"start":98.1,"text":"“This is not a gradual deterioration, it is a cliff edge . . . Cheque clearing and interbank settlement will come to a halt,” Shunnar said. “And because those cheques are widely pledged as collateral for credits, legal, liquidity and operational risks will begin to compound immediately.”"}],[{"start":117.8,"text":"Before the eruption of the war in Gaza in 2023, Israel for years issued an annual waiver to domestic banks providing correspondent services to Palestinian lenders, granting them protection against international or Israeli lawsuits."}],[{"start":133.95,"text":"But in the years since, Israel’s ultranationalist finance minister Bezalel Smotrich — who has made no secret of his desire to push the Palestinian Authority to collapse — has repeatedly threatened not to renew the extension, before ultimately granting shorter and shorter extensions — in some cases for as little as two weeks. "}],[{"start":153.64999999999998,"text":"Although Israel recently extended the waiver until the end of the year, people working on the topic said the repeated bouts of uncertainty over previous extensions had created an atmosphere in which it was very difficult for private banks to do business."}],[{"start":167.04999999999998,"text":"“This is symptomatic of that point where the system was pushed too far,” said one."}],[{"start":172.45,"text":"Bank Hapoalim said the future of correspondent banking services was “currently under review”. "}],[{"start":179.39999999999998,"text":"Discount Bank said the lender had provided the services on a temporary basis, pending the implementation of a permanent solution by Israel. But that had not materialised, while the risks associated with providing correspondent banking services had risen. "}],[{"start":193.64999999999998,"text":"“We remain willing to assist with the operational solution, provided that the relevant responsibility and risk are assumed by the state,” it said."}],[{"start":203.45,"text":"The Israeli finance ministry said it was in discussions with Bank Hapoalim and Discount Bank “to examine additional relevant governmental and regulatory measures that would enable the continuation of correspondent banking activities in a safe and responsible manner, while safeguarding the security and economic interests of the State of Israel”."}],[{"start":223.1,"text":"It added that the two banks had taken the decision to suspend services “due to the increased exposure to international lawsuits and sanctions related to money laundering and terrorist financing”."}],[{"start":234.1,"text":"However, a review of the Palestinian banking system by the US and UK in 2024 found that the PMA’s counterterrorism funding mechanisms met or exceeded international standards."}],[{"start":253.4,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1784860374_4873.mp3"}