Banks Boggled by EU Sanctions Threat

YERUSHALAYIM -

While the Israeli government was downplaying the significance of a think-tank paper urging European Union sanctions against Israeli banks and other institutions, reaction within the industry was one of alarm, Globes reported Thursday.

Israeli bankers were said to be “very surprised” by the news, and bank shares fell in response to it as well. Those with substantial overseas business — Bank Hapoalim, Bank Leumi, and Israel Discount Bank — lost about 2.5%.

“For the European, the [disputed areas] include Yerushalayim and the Golan Heights, which means that almost all the banks are involved. It is hard to quantify the threat, but it is dramatic,” a senior banking source said.

Israel’s Foreign Ministry said on Wednesday it would not respond to the report, since it was not a document or decision of the EU, merely an advisory paper that was publicized in a Reuters story.

A senior EU official said later on Wednesday that such action is not on the agenda, according to Ynet.

“We have no intention of imposing restrictions on Israeli banks that do business in the settlements. This entire issue is complete nonsense. This issue has never been considered,” the diplomat said.