‘Catastrophe’: Former Israeli chief banker slams Netanyahu’s warning about sanctions

Former Bank of Israel governor Jacob Frenkel says Prime Minister Benjamin Netanyahu’s warning that Israel could be facing sweeping banking sanctions are a “catastrophe” for Israeli consumers and the local economy.

“Fear and uncertainty paralyze the economy,” Frenkel tells Channel 12. “We want to boost the economy, and we want investors, but what are we telling them? ‘Invest with us, when we are going to be under sanctions and our system is unstable.'”

On Friday, Netanyahu said Israel should prepare for potential international sanctions on its banking system, and could use cryptocurrency and blockchain technology to circumvent them.

“When I heard the remarks, I was shocked and asked myself, where was the staff work and consultation that led to such a conclusion?” says Frenkel. “I don’t know a single serious professional who would support this approach.”

Frenkel cautions that potential sanctions on the financial system could affect cross-border transactions, including the transfer of funds by tech investors to the country, and credit card use by Israeli consumers to make online purchases on Amazon or other global e-commerce platforms.

“There are no tricks. If you leave the international financial clearing system, you are a leper,” Frenkel says. “It means that everyone takes their distance from you, and changing that image after you declared yourself a leper would be very difficult.”

“Every citizen will suffer if we are cut off from the world,” Frenkel says.