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Thursday May 13, 2010 9:02 AM (EST+7)
Regulator: Gaza banking OK, despite closures

Read more: banking, finances, economy, Arab Bank, Gaza Strip

RAMALLAH, May 13 (JMCC) - The top Palestinian financial regulator sought to assure an anxious public Wednesday that the Gaza Strip is not facing a banking crisis after the Palestinian territories' largest lender closed two of its three Gaza branches last week, reports the Associated Press.

Economists have said there is concern other lenders would follow Arab Bank's lead and cut back on their operations in the Gaza Strip, possibly bringing down Gaza's banking system.

Arab Bank has said it is scaling back because of worsening conditions in Gaza, but declined to elaborate.

Since Hamas seized Gaza by force in 2007, the nine banks maintaining branches in Gaza have tried to stay clear of the Islamic militants so as not to violate international anti-terrorism regulations. Hamas is listed as a terrorist organization in the U.S. and Europe, and banks could face sanctions if they work with Hamas.

Hamas officials reiterated Wednesday they don't intend to interfere in bank business.

However, recent signs of greater Hamas assertiveness have raised concerns. In March, Hamas seized $400,000 from the Bank of Palestine account of a private Gaza charity after taking control of the organization, banking regulators said at the time.

Jihad al-Wazir, the top Palestinian banking official, tried to reassure depositors Wednesday that the Gaza banking system is stable. Al-Wazir heads the West Bank-based Palestine Monetary Authority, which reports to Hamas' rival, the internationally backed government of Palestinian President Mahmoud Abbas.

Read the rest of the story at AP...






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