The Treasury Department’s point man on combating the Islamic State (IS) said Oct. 23 that the United States was opposed to “shutting down” economic activity in IS-controlled areas.

The remarks by Undersecretary David Cohen are a frank acknowledgment of the delicate balancing act the Obama administration faces in its fight against IS. Even as it tries to cut off funding for the terrorist organization, the United States seeks to avoid alienating Iraqis and further destabilizing Baghdad.

“We’ve also begun conversations with the Iraqi government and with other financial regulatory authorities around the world about our concerns with the bank branches that are within the [IS]-controlled territory,” Cohen said in remarks at the Carnegie Endowment for International Peace. “This is a difficult problem, because our interest is not in shutting down all economic activity in the areas where [IS] currently operates. They are subjugating huge swathes of population, millions of people, who are still trying to live their lives and banks as everybody knows are an important lubricants for the economy.”

The remarks immediately caught the attention of advocates of a more forceful approach.