the CBJ and the BOI in a manner which conforms to the guidelines of the Basle Concordat. In addition, the 1995 Jordanian-Palestinian Agreement of Cooperation confirms the status of the PMA as the home supervisory authority in the Palestinian territories.61 Finally, the Israeli-Palestinian Paris Accord on Economic Affairs names the PMA as the host supervisory authority over Israeli banks operating in the Palestinian territories.62
The BOI has made it clear that it does not intend to exercise a supervisory role beyond the minimum required by the Basle Concordat. BOI officials emphasize that the risk of a liquidity crisis is minimal given the small loan/deposit ratio (23% as of March 1995 in the West Bank excluding Jericho). They also rightly argue that the Palestinian economy and its deposits correspond to a very small fraction of the Israeli economy at
61
Agreement of Cooperation in the Field of Monetary and Banking
Affairs Between the Hashemite Kingdom of Jordan and the Palestinian National Authority, art. 2(2). 62Protocol
on Economic Relations between the Government of the State of Israel and the PLO,
representing the Palestinian people, Article IV, 8 & 9.