Latest news with #KarimSouaid
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.
LBCI
09-05-2025
- Business
- LBCI
Path to Lebanon's banking reform law remains slow and challenging — The details
Report by Lea Fayad, English adaptation by Mariella Succar The road to financial reforms in Lebanon—especially the banking reform law—remains far from smooth. Although the government approved the law about a month ago, it is still awaiting discussion and ratification in Parliament. During the latest parliamentary Finance and Budget Committee session, Banque du Liban Governor Karim Souaid submitted a legal study that criticized several aspects of the draft law. These included concerns about undermining the Central Bank's independence and expanding the powers of the Banking Control Commission. In response, committee chair Ibrahim Kanaan announced the formation of a subcommittee to examine the bill further and work toward a more acceptable version before it is brought back to the main committee, and then eventually to Parliament. This raised concerns over a possible repeat of the delays and obstruction that have plagued reform efforts since 2020. However, Finance Minister Yassine Jaber expressed optimism. He dismissed fears of deadlock and said the reform laws are intended to revive the banking sector, not harm it, as some have claimed. He made the remarks during a meeting with Economic and Social Council members. During the same meeting, participants called on the minister to address a range of other financial issues. Mohammad Choucair highlighted the need for customs reform; Farid Boustany raised concerns about public sector salaries; and Bechara Asmar focused on tax policies. Lebanon remains in dire need of a comprehensive reform drive. Among the most urgent reforms is the banking reform law, seen as a key step toward restoring public and international trust in the country's financial institutions and unlocking vital foreign funding.
Ya Libnan
04-04-2025
- Business
- Ya Libnan
Lebanon's new Central Bank governor vows to fight financing terrorism and return depositors' money
BEIRUT, Lebanon- Lebanon's new central bank governor pledged Friday to fight money laundering, terrorism and drug smuggling and emphasized the need to restructure the banking sector and return depositors' money. 'The Central Bank will work on combating all kinds of money laundering, financing terrorism, drug smuggling, smuggling across the borders, currency counterfeiting, and the illegal circulation of money in the economy,' Karim Souaid said after he officially took office. Lebanon has been requested, particularly by the United States, to fight financing terrorism and money laundering in exchange for helping it get out of its acute financial and economic crisis. Washington's main concern is to prevent Hezbollah, the Iran-backed militia , from using the country's banking system and cash economy to rebuild itself. Souaid was appointed last week by the government to replace Riad Salameh, the former Central bank governor who stepped down last year after remaining in his post for three decades. Salameh was arrested last September, becoming the first high-ranking official to be put behind bars on corruption and embezzlement charges since the 2019 financial crisis that led to the collapse of the country. Souaid's appointment came as Lebanon was still trying to reverse its economic crisis, described by the World Bank as one of the worst in the world since the mid-19th century. Tackling one of the crisis's most shaky issues, the new central bank governor said depositors' bank savings were protected by the Lebanese law and the Constitution. 'Therefore, we should work on returning all deposits gradually,' Souaid said during the official handover ceremony with Wissam Mansouri, who served as acting central bank governor since July 2023. Souaid said the Lebanese banks, Central Bank and the Lebanese state should shoulder their responsibilities in returning deposits, adding that the 'priority' must be to first pay the small depositors whom he described as 'the weakest circle.' Depositors have been struggling to secure their rights after the banks deprived them of their life savings since the crisis began in 2019 by imposing their own rules in the absence of any government measure to regulate the financial sector. The crisis, which the World Bank described as Lebanon's 'deliberate depression' orchestrated by the country's corrupt ruling elite that had exploited state resources for decades, led to financial losses estimated at some $72 billion. (UPI)
Yahoo
04-04-2025
- Business
- Yahoo
Lebanon's new Central Bank governor vows to fight financing terrorism
BEIRUT, Lebanon, April 4 (UPI) -- Lebanon's new central bank governor pledged Friday to fight money laundering, terrorism and drug smuggling and emphasized the need to restructure the banking sector and return depositors' money. "The Central Bank will work on combating all kinds of money laundering, financing terrorism, drug smuggling, smuggling across the borders, currency counterfeiting, and the illegal circulation of money in the economy," Karim Souaid said after he officially took office. Lebanon has been requested, particularly by the United States, to fight financing terrorism and money laundering in exchange for helping it get out of its acute financial and economic crisis. Washington's main concern is to prevent Hezbollah, the Iran-backed militant group, from using the country's banking system and cash economy to rebuild itself. Souaid was appointed last week by the government to replace Riad Salameh, the former Central bank governor who stepped down last year after remaining in his post for three decades. Salameh was arrested last September, becoming the first high-ranking official to be put behind bars on corruption and embezzlement charges since the 2019 financial crisis that led to the collapse of the country. Souaid's appointment came as Lebanon was still trying to reverse its economic crisis, described by the World Bank as one of the worst in the world since the mid-19th century. Tackling one of the crisis's most shaky issues, the new central bank governor said depositors' bank savings were protected by the Lebanese law and the Constitution. "Therefore, we should work on returning all deposits gradually," Souaid said during the official handover ceremony with Wissam Mansouri, who served as acting central bank governor since July 2023. Souaid saud the Lebanese banks, Central Bank and the Lebanese state should shoulder their responsibilities in returning deposits, adding that the "priority" must be to first pay the small depositors whom he described as "the weakest circle." Depositors have been struggling to secure their rights after the banks deprived them of their life savings since the crisis began in 2019 by imposing their own rules in the absence of any government measure to regulate the financial sector. The crisis, which the World Bank described as Lebanon's "deliberate depression" orchestrated by the country's corrupt ruling elite that had exploited state resources for decades, led to financial losses estimated at some $72 billion. According to a policy paper published by Lebanese economic expert Toufic Gaspard in 2022, total bank deposits were the equivalent of $169 billion just a month before the October 2019 financial crisis. The banking collapse, Gaspard said, practically wiped out the wealth accumulated in banks by three generations. Souaid said all private banks should increase their capital by injecting fresh funds gradually, and the ones that "are unable or do not wish to increase their capitals should merge with other banks or they will be liquidated." He also pledged to ensure the Central Bank's independence and to preserve it from "political pressures and the influence of the banking sector" in order to prevent conflicts of interest. Mansouri, the outgoing acting central bank governor, said that "the historical decision" that the Central Bank adopted to stop funding the government led to an increase in its foreign reserves by $2.2 billion since August 2023. Hei said Central Bank foreign reserves reached $10.727 billion by the end of last March. Lebanese officials have done little to adopt well-needed reforms as requested by the international community to release long-promised financial assistance and funds. The new government, headed by Prime Minister Nawaf Salam, pledged to speed the reforms and secure the necessary funds to revive the economy and most importantly recover from Israel's 14-month destructive war with Hezbollah. According to the World Bank, Lebanon needs $11 billion for reconstruction and recovery from Israel's recent war.
The National
04-04-2025
- Business
- The National
Lebanon's new central bank chief vows to combat money laundering as cabinet discusses bank reforms
Lebanon 's new central bank chief pledged to combat money laundering and terror financing, and to rebuild trust in the country's much-maligned banking sector as he formally assumed office on Friday. Karim Souaid, a former asset manager, said work must be done to ensure that depositors who were locked out of their life savings after Lebanon's 2019 economic collapse have their money returned, albeit gradually, with priority given to holders of smaller amounts. Financial institutions including the central bank 'and the Lebanese state must assume their responsibilities' in this matter, Mr Souaid said. 'The Bank of Lebanon will work to eliminate the illegal economy by combating money laundering and terrorist financing,' he said. The bank would work independently, without political interference, he added. The 2019 economic collapse was blamed on decades of financial mismanagement and corruption by Lebanon's ruling elite. Mr Souaid's predecessor, Riad Salameh, has been accused of helping to embezzle hundreds of millions of dollars from the central bank. Mr Souaid replaced interim governor Wassim Mansouri, who has overseen the central bank since Mr Salameh stepped down at the end of his term in 2023 after 30 years in charge. Mr Souaid's appointment was favoured by Lebanon's banking sector and President Joseph Aoun, although not by Prime Minister Nawaf Salam. Changes to Lebanon's banking sector are among key reforms demanded by international backers and lenders before the country can receive assistance. In April 2022, Lebanon reached a staff-level agreement with the International Monetary Fund on a comprehensive economic reform programme supported by a 46-month extended fund facility, proposing access to about $3 billion. However, Lebanese authorities have been accused of dragging their feet on the required reforms. The Lebanese cabinet on Friday discussed restructuring the banking sector and is expected to continue its deliberations next week. As the central bank governor, Mr Souaid will play a key role in managing the restructuring, and in restoring international confidence in Lebanon's financial system. His appointment comes as Lebanon seeks to recover from the financial losses incurred since the 2019 crisis, as well as the cost of the latest war between the armed Lebanese group Hezbollah and Israel, estimated at about $11 billion by the World Bank. The financial sector will be expected, at least by some countries, to combat corruption and curb any illicit financing for Hezbollah through the banking system. However, the group is widely believed to have used parallel economic networks to finance its activities. The new US administration of President Donald Trump has taken a hard line on the status of Hezbollah, seeking its complete disarmament – a highly delicate and sensitive issue in Lebanon. US envoy Morgan Ortagus arrived in Beirut on Friday for talks with Lebanese leaders, Discussions are expected to include contested border points between Israel and Lebanon in the south. Israeli troops continue to occupy five points on Lebanese soil, in violation of the ceasefire deal that ended the war in November.
