Latest news with #BanqueduLiban
LBCI
21-05-2025
- Business
- LBCI
Equal rules for all banks: Lebanon's central bank seeks fast-track solution to return billions in trapped deposits
Report by Lea Fayad, English adaptation by Karine Keuchkerian If you've been benefiting from Banque du Liban's circulars and withdrawing $500 or $250 per month, depending on your individual limit, you're likely wondering whether those amounts will increase soon. So far, there is no definitive decision from the central bank on the matter. According to banking sources, the current priority is finding a swift and comprehensive solution to the issue of frozen deposits in Lebanese banks. 'It is essential that deposits be returned to their owners in full,' said Banque du Liban Governor Karim Souaid during his first meeting with a delegation from the Association of Banks in Lebanon. The governor shared his vision and ideas for restoring the central bank's financial balance to distribute losses and responsibilities eventually. According to available figures, the total value of frozen deposits is estimated at around $85 billion. The governor is working on a plan to reduce that amount by addressing irregularities that occurred both before and after the onset of the crisis. Among the proposed ideas, according to banking sources, is the deduction of certain amounts from specific categories of deposits. These include individuals who benefited from high interest rates and financial engineering schemes, those who repaid dollar-denominated loans in Lebanese lira at the official rate of 1,500 LBP or other below-market rates, and those who converted their deposits from Lebanese lira to U.S. dollars at the 1,500 rate after the 2019 crisis. Deductions may also apply to accounts with sources of funds deemed suspicious. Following such deductions—or partial deductions—the total value of deposits would be reduced, making repayment more manageable. Responsibility for repaying depositors would be shared among the state, Banque du Liban, and the banks, which would be required to increase their capital and liquidity. The governor reportedly told the Association of Banks that all financial institutions will be treated equally, with no favoritism, emphasizing his role as a regulator rather than a stakeholder. He also underlined the importance of maintaining the central bank's independence from the state, in order to protect its assets from potential lawsuits by Eurobond holders against the Lebanese government. Such legal action could target Lebanon's gold reserves, which are owned by the central bank and ultimately by depositors. Sources within the Association of Banks described the meeting as positive, especially because they were included in the vision, ideas, and dialogue aimed at resolving the crisis—a shift from previous approaches in which the association was excluded from discussions.
L'Orient-Le Jour
09-05-2025
- Business
- L'Orient-Le Jour
At BDL, Aoun endorses Souhaid again
"You bear a heavy responsibility to restore both internal and international confidence in the Lebanese banking system and to protect the national currency," President Joseph Aoun told the central bank officials during a rare but symbolic visit to the institution's headquarters on Thursday, May his "confidence that with good intentions and everyone's cooperation, accomplishments will follow in line with our expectations for Lebanon and the Lebanese," Aoun then toured the premises, punctuated by significant messages about the progress of reforms and the role of the Banque du Liban in this process. "With this relatively unprecedented gesture, the president clearly wanted to demonstrate his confidence in the governor during this delicate period for the implementation of reforms, while conveying...
L'Orient-Le Jour
08-05-2025
- Business
- L'Orient-Le Jour
Aoun to Souhaid: You bear the heavy responsibility of restoring trust in banks
Lebanese president, Joseph Aoun, visited the headquarters of the Banque du Liban (BDL) Thursday morning for a meeting with the governor of the institution, Karim Souhaid, and his deputy governors, stating that Souhaid has the "heavy responsibility" of restoring confidence in the Lebanese banking system. This visit comes as the governor had strongly criticized earlier in the week, before the parliamentary finance committee, the banking restructuring bill, approved by the government and sent to Parliament. Souhaid had denounced a project "unconstitutional and that undermines the principle of the BDL's independence." "You bear a heavy responsibility to restore trust, both internally and internationally, in the Lebanese banking system and to protect the national currency," said Joseph Aoun to the officials of the financial institution. "Work carried out in complete transparency, free from political interference, will contribute to economic recovery," he added according to the presidency's X account. Appointed on March 27 to head the BDL in succession to Riad Salameh, Souhaid now occupies a key position in the implementation of reforms required by the international community in a country still mired in an unprecedented economic crisis. Souhaid told the President, according to the official state-run National News Agency (NNA), that he would "work to preserve the independence and integrity of the Central Bank of Lebanon and protect it from any interference, regardless of its source." He added, "We will act in accordance with the law to serve Lebanon's best interests." With the support of 17 out of the 24 ministers in Nawaf Salam's government, the new governor has, from the start, had the stated backing of the head of state. The latter sees in him the most suitable candidate to accompany the government in developing viable solutions, to advance the expected legislative reforms, to restore depositors' rights, and to lay the foundations for a sustainable monetary policy. This deadline constituted the first showdown between Aoun and Salam, who indeed expressed reservations against Souhaid, whom he considered too close to banking circles to the point of making the state – and therefore the taxpayer – bear the brunt of the cost related to the return of deposits.
L'Orient-Le Jour
02-05-2025
- Business
- L'Orient-Le Jour
Hacking Lebanese Politics #6: What's the deal with the banking secrecy law?
You might have heard about it, but never really paid attention. Banking secrecy. It sounds like something straight out of a spy novel. But in Lebanon, it's been at the core of a financial system based on the permanent attraction of capital, sometimes illicit or derived from corruption. In 2019, things came to a head, when Lebanon's financial crisis erupted. Millions of dollars vanished. This secrecy was a major reason why nobody has been held accountable since the 2019 crisis. But that might finally be changing. On March 24, Parliament passed the third amendment to Lebanon's banking secrecy law since the collapse of the financial system (back in 2019). It passed overwhelmingly: 87 MPs voted in favor, 13 against. So, what does that mean? Why now? And could it finally help people recover what they lost? Let's break it down. 1. What is Lebanon's banking secrecy law, and why does it matter? Back in 1956, Lebanon adopted a law to protect the confidentiality of bank clients. The goal? Attract regional capital and become the Switzerland of the Middle East. But after the 1975-90 Civil War, even if the economic growth was still mainly relying on the financial sector and foreign capital attraction, the banking secrecy also enabled the surge of corruption, tax evasion, and financial crime. In 2019, because of the financial and economic crisis, depositors were locked out of their accounts. Yet despite widespread losses, no one was held accountable, because banking secrecy laws, one of other reasons, made it nearly impossible to trace responsibility. 2. What's changed in the new amendments? Under pressure from the IMF, international donors, and financial watchdogs, Lebanon passed new amendments in March 2025, arguably its most serious reform yet. Here's what's different: 10-year retroactive scope: Investigators can now look back ten years to uncover potential money laundering or illicit enrichment. Thus, it allows them to go back as far as 2015, when Banque du Liban launched its first financial engineering projects, which many experts called a state-sanctioned Ponzi scheme. Audit access expanded: Auditors and evaluators, not just Banque du Liban (BDL) and the Banking Control Commission (BCC), can now access sensitive banking information. Previously, BDL and BCC were the only ones allowed, and both are widely seen as institutionally compromised in the system's failures. Administrative process updated: Access to decisions no longer rests solely with the Finance Ministry - which is accused by some observers and MP's to have failed to supervise BDL's actions in the past – but now require a ministerial decree, with BDL consultation. 3. Why does this matter? And will it help depositors? This reform is a crucial step in Lebanon's path toward financial accountability and economic recovery, even if it doesn't mean immediate justice. Here's what it could change: This is the first serious move in a process that could trace what happened to depositors' money during the financial collapse in 2019.
L'Orient-Le Jour
02-05-2025
- Business
- L'Orient-Le Jour
French expertise 'crucial' for Lebanon's recovery, asserts Souhaid
BEIRUT — New governor of Banque du Liban (BDL), Karim Souhaid, announced in a statement that he had met with François Villeroy de Galhau, governor of the Banque de France (BDF), and Bertrand Dumont, director general of the French Treasury, in Paris on April 28 and 29, 2025. This visit "is part of a series of exchanges aimed at strengthening the long-standing relationship between the Banque du Liban and French monetary and financial institutions," wrote Souhaid. "At this critical juncture in Lebanon's economic journey, such partnerships are indispensable. France's in-depth expertise and institutional leadership—particularly in managing and resolving complex monetary and banking crises at the European level—remain of crucial relevance for Lebanon's ongoing recovery process," the statement issued Tuesday evening highlights. According to BDL, these meetings take place in the context of a visit by a Lebanese delegation representing the Lebanese presidency and government to Washington, during the spring meetings of the International Monetary Fund (IMF) and the World Bank (WB) last week. During these days, the delegation, led by Lebanese Finance Minister Yassine Jaber and Economy Minister Amer Bsat, as well as the governor, met with officials from both organizations to advance the reform dossier aimed at reviving the country, in crisis since 2019, and funding reconstruction in Lebanon, severely affected by the war between Israel and Hezbollah. 'Strategic Support' The delegation also met with officials from the U.S. State Department and Treasury, as well as French officials, including Dumont. The BDL noted that these exchanges were constructive. According to the BDL statement, the director general of the French Treasury "reiterated France's willingness to provide strategic support and guidance to improve the institutional efficiency of the Banque du Liban and enhance its role as a credible partner in all matters related to monetary and banking reform." During the meeting at the Banque de France, François Villeroy de Galhau "discussed the role of the Banque du Liban in developing and implementing solutions in close coordination with the Lebanese government, as well as the importance of maintaining a strong and transparent partnership with the IMF," to which the government of Nawaf Salam and President Joseph Aoun, in place since the beginning of the year, have renewed Lebanon's request for membership in a financial assistance program. "The exchanges were constructive and forward-looking. Governor Villeroy de Galhau reaffirmed the commitment of the Banque de France and the French government to support Lebanon and its central bank through relevant advice, strategic assistance, training programs, and the transfer of best practices aligned with international standards. This collaboration is part of a broader effort to modernize institutional frameworks and strengthen the operational capacities of the BDL," wrote the Banque du Liban. A week ago, Lebanon voted on a law updating its banking secrecy legislation, in a manner deemed satisfactory by the IMF. To persuade the Fund to go further, the country must also adopt a banking resolution law, which sets the framework for a sector restructuring aligned with international standards. A draft law, recently adopted by the Council of Ministers, is set to be reviewed Wednesday by the Finance and Budget committee. In another statement issued Wednesday in response to allegations against it in the Lebanese media, the BDL announced it is "working on a first version of a restructuring plan for the banking sector, which will be discussed with Lebanese authorities, the IMF, and international experts," and advocated for a "collective, balanced, and accepted approach by all parties, aiming to guarantee the gradual repayment of deposits and economic recovery." On Tuesday, Yassine Jaber met with officials of the Association of Banksof Lebanon (ABL), to whom he stated that the country's priority was to allow the sector, which had illegally frozen tens of billions of dollars in deposits during the crisis, to start functioning normally again — a message he had also conveyed from Washington. During the spring meetings, Governor Karim Souhaid issued a statement to IMF officials in which he assured that Lebanon was "ready to make difficult choices, to bear the political cost of reform, and to hold itself accountable." He also emphasized that the BDL's top priority is to preserve the state's assets while working, alongside the government and the banking sector, to restore the solvency and credibility of the financial system. The decisions of the central bank before and during the crisis were one of the factors that contributed to the country's collapse.
