By SCM International Desk I Thursday, Oct. 15, 2026
NEW YORK — New York City Comptroller Mark Levine has backed away from a prominent campaign commitment to resume municipal investments in Israeli government bonds, citing heightened financial risk and degraded credit ratings brought on by the ongoing war in Gaza and expanding regional instability.
The decision, confirmed by Mr. Levine in an interview, represents a significant policy reversal for the chief fiscal officer of the nation’s largest city. During his campaign for comptroller, Mr. Levine had pledged to restore Israeli sovereign debt to the city’s portfolio, breaking with his predecessor, Brad Lander, who had allowed roughly $40 million in Israeli bonds to mature and expire in 2023 without repurchasing.
In walking back his promise, Mr. Levine acknowledged that he had underestimated the fiscal hazards associated with foreign sovereign holdings during a period of prolonged military conflict.
Major international credit rating agencies have downgraded Israel’s sovereign credit rating over the past year, reflecting the heavy economic toll of military operations in Gaza and the surrounding region, as well as broader budget deficits.
”I always said this would be based on financial considerations only, not politics,” Mr. Levine said, adding that an internal evaluation by his office’s investment team concluded that purchasing foreign debt instruments under present economic conditions carried unacceptable risks for the municipal pension funds.
Mr. Levine, a Jewish Democrat who speaks fluent Hebrew and has family ties in Israel, remains a steadfast supporter of the state. However, he emphasized that his primary role as comptroller is to serve as the fiduciary custodian of more than $250 billion in city pension assets, which requires prioritizing risk-adjusted returns over political sentiment.
The decision lands amid intense political debates in New York City regarding municipal investments and foreign affairs.
For nearly five decades, New York City had routinely held Israeli government bonds as part of its diversified investment strategy.
The practice came under scrutiny when Mr. Lander, who is also Jewish and a progressive critic of Israel’s current administration, adopted a general policy against buying single-nation foreign sovereign bonds, prompting intense pushback from pro-Israel leaders and municipal politicians.
While pro-Palestinian advocacy groups and progressive coalition members welcomed Mr. Levine’s move as a step toward broader divestment, Mr. Levine clarified that his decision does not constitute a Boycott, Divestment, and Sanctions (BDS) policy. The comptroller’s office noted that the pension funds retain more than $285 million in private Israeli corporate equities and assets, which remain untouched by the decision regarding state-issued debt.
A spokesperson for Development Corporation for Israel, the U.S. underwriter for Israel Bonds, defended the reliability of the debt instruments, noting that the nation has maintained an uninterrupted record of meeting all principal and interest payments since its founding.
Nevertheless, Mr. Levine indicated that until economic indicators stabilize and credit risk profiles improve, New York City will refrain from issuing new capital into foreign sovereign bonds.
