Report Arab Banks Ready to Accept Compromise on Blacklist

Arab banks are ready to accept compromise on blacklisting of Jewish banks, an Arab banker told the Herald Tribune here today. The Arab banks have been following a policy of excluding Jewish banks, Lazard Freres, Rothschild, and Warburg of London, from participation in underwriting international bonds. The technique employed is to refuse to underwrite any loans when the Jewish banks are included. In such cases, other banks are tempted to succumb to Arab pressures and exclude the Jewish banks.

Roger Azar, director of the Banque Arabe at Internationale d’Investisement (Arab and International Investment Bank) told the Paris newspaper today: “Arab banks will continue to ask that the banks on the blacklist be excluded” but the Arabs will “not withdraw if the lead manager insists on keeping the Jewish banks in the syndicate.”

Finance Minister Jean-Pierre Fourcade has declared that the Finance Ministry is “studying the problem. It is a question of knowing whether or not there is discrimination.” The Minister pointed out that it is “usual” for banks to choose their partners when forming a group of underwriters for an international bond.

Fourcade has contacted Jean Guyot, director of the Lazard Freres bank, to study his point of view. Azar also told the Herald Tribune that the compromise would not mean the end of the Arab boycott. Arab banks will not consider working as co-managers with a Jewish bank, for that would damage the “spirit” of the boycott.

But the banks do want a return to calm. The affair “has been blown up by the press, and is at the stage where it is stupid,” the Arab banker declared. “Most bankers want to do things to calm things down.” An official protest has been presented to the French Professional Banking Association by the Rothschild bank, asking for an investigation.