British banking giant Barclays has decided to continue its role as a primary dealer in Israeli government bonds, despite mounting pressure from pro-Palestinian activists.
This decision comes after a period of internal review and discussions with Israeli officials.
Barclays, one of seven foreign lenders assisting the Israeli government in selling debt, had considered withdrawing from future Israeli government bond auctions. The bank was reportedly reevaluating its exposure to Israel in light of criticism over its relationship with the country during the war against Hamas in Gaza.
However, following extensive deliberations, Barclays informed Israeli officials of its intention to maintain its position as a primary dealer. This role places the bank alongside other international financial powerhouses such as Goldman Sachs, JPMorgan Chase and Deutsche Bank in facilitating Israel’s debt sales.
Yali Rothenberg, Israel’s accountant general, publicly shared his appreciation for Barclays’ commitment in an interview with The Financial Times on Tuesday.
“We appreciate the bank’s statement affirming its continued commitment to the State of Israel. It is crucial that leading global financial institutions, such as Barclays, choose to resist boycotting Israel and support its legitimate right to self-defense as a leading Western democracy,” said Rothenberg.
The decision by Barclays comes at a crucial time for Israel’s financial markets. The country has been selling billions of dollars in debt to finance its widening government deficit, a direct result of the war. In March, Israel conducted a record $8 billion international bond sale, which according to Bloomberg was its biggest sale of dollar notes on record.
Barclays’ involvement in these bond sales has not been without controversy. The bank has faced increasing pressure from activists who have called for a boycott over alleged investments in defense companies supplying arms to the Israel Defense Forces. Protesters have targeted several Barclays branches across the United Kingdom, with a number of incidents resulting in property damage.
Activists claim that Barclays holds over £1 billion in shares and provides more than £3 billion in loans to nine companies whose weapons and military technology are used by Israel in its operations against Hamas. In response, Barclays has clarified that it trades in these companies’ shares on behalf of clients, but does not invest in them directly.
The bank further stated in May that it does not invest its own money in companies supplying weapons used by Israel in Gaza, emphasizing its role as a trader rather than an investor. This clarification came after one of its London branches was targeted by pro-Palestinian activists.
The situation reflects a broader trend of financial institutions facing scrutiny over their connections to the Israeli-Palestinian conflict. Lloyds Banking Group saw its annual shareholder meeting disrupted by activists in May who were protesting against its alleged provision of financial services to defense firms linked to violence in the Middle East.
The ongoing conflict has also had wider financial implications for Israel. Fitch Ratings, a world-leading credit agency, recently downgraded the country’s debt rating from A+ to A, citing geopolitical risks stemming from the war. Similar moves have been made by Moody’s and S&P Global, indicating growing concerns about the conflict’s impact on Israel’s economic stability.
Despite these challenges, Israel has found support. Several U.S. municipal governments have increased their purchases of Israeli bonds as a gesture of solidarity.
Barclays stated that it was preparing a response to Israel’s latest request for bids on its next bond sale, due later this week.
