Latest news with #MonetaryandCreditLaw
LBCI
24-04-2025
- Business
- LBCI
Lebanon's President signs banking secrecy law amendments
President Joseph Aoun signed a series of amendments to Lebanon's banking secrecy law Thursday after Parliament passed the bill. The reform is seen as a significant milestone in Lebanon's broader financial recovery agenda. Law No. 1, dated April 24, 2025, amends specific clauses within the longstanding Banking Secrecy Law of 1956, specifically paragraphs (e) and (f) of Article 7, as well as Article 150 of the Monetary and Credit Law of August 1, 1963, as previously modified by Law No. 106 of October 28, 2022. The president requested that the law be published according to constitutional procedures, ensuring its swift enforcement.
National News
04-04-2025
- Business
- National News
Karim Saiid assumes governorship of Lebanese Central Bank as Mansouri highlights key reforms
NNA - During the handover ceremony at the Lebanese Central Bank, Acting Governor Wassim Mansouri congratulated incoming Governor, Karim Saiid, expressing confidence that 'the central bank is in trustworthy hands.' Mansouri emphasized the historic decision to halt state financing, grounded in the Monetary and Credit Law, citing public interest as the sole driver behind BDL's policies. He noted the shutdown of the Sayrafa platform despite risks to the exchange rate, crediting monetary coordination with the government for containing inflation. Moreover, Mansouri announced a rise in BDL's foreign currency reserves, an audit of the gold holdings, and the full cleanup of the central bank's balance sheet, including the dismantling of financial engineering remnants. He stressed the need for a comprehensive government-endorsed deposit recovery plan and confirmed the restoration of relations with correspondent banks, distancing BDL and Lebanon's banking sector from FATF's grey list. In his remarks, Governor Karim Saiid praised the central bank's staff for ensuring continuity during Lebanon's crisis. He pledged full adherence to the constitution and banking regulations, urging the recapitalization of commercial banks and their contribution to deposit repayments. He also called for restructuring the sector and restoring public trust through legal financial channels, combating illicit finance, and requiring banks to boost capital or consider mergers. Saiid concluded by announcing a shift in the Central Bank's public communication strategy, stating the bank will now adopt a 'silent observer' role, limiting its outreach to official statements and economic reports.
LBCI
28-03-2025
- Business
- LBCI
Ahead of talks with IMF and World Bank: Can new BDL governor Karim Souaid deliver solutions?
Report by Bassam Abou Zeid, English adaptation by Yasmine Jaroudi Lebanon's newly appointed Banque du Liban (BDL) governor, Karim Souaid, addressed key financial policy issues during a Cabinet session, shedding light on his stance on deposit recovery, state assets, and the country's economic future. During the meeting, ministers questioned Souaid extensively about Lebanon's financial crisis and potential solutions. He clarified that while his former institution had funded a study by the Harvard Growth Lab on Lebanon's economic collapse, he did not endorse its conclusions. Responding to ministers' inquiries further demonstrated his opposition to the study's recommendations. Souaid firmly opposed the write-off of bank deposits, instead advocating for a structured plan to return funds based on available financial resources. He underscored his commitment to constitutional principles and the Monetary and Credit Law, emphasizing the protection of private property. Rejecting the sale of state assets or Lebanon's gold reserves, Souaid suggested investing a portion of the gold holdings to generate liquidity for deposit recovery. He acknowledged the state's role in the financial collapse but distinguished between sovereign debt—such as Eurobonds—and commercial debt involving the BDL and local banks. His statements, which were officially recorded in the Cabinet's official minutes, garnered mixed reactions. While some ministers were satisfied with his answers, others, particularly those aligned with Prime Minister Nawaf Salam, were more skeptical due to concerns over a promotional campaign in the media and banking circles, which raised doubts about Souaid's background. In response to a direct question from PM Salam, Souaid stated that he had met banker Antoun Sehnaoui only once. Souaid now faces a challenging path ahead. He is set to present his economic strategy at the upcoming International Monetary Fund (IMF) and World Bank meetings in Washington on April 21, where Finance Minister Yassine Jaber and Economy Minister Amer Bisat will join him. The Lebanese delegation is expected to present a bill to ease banking secrecy laws, which the Cabinet approved with retroactive effects extending over ten years. However, whether this provision will pass in the Lebanese Parliament remains uncertain. Additionally, the Lebanese delegation will present a framework for restructuring the banking sector and discuss newly approved appointments with the Council for Development and Reconstruction.
Asharq Al-Awsat
25-03-2025
- Business
- Asharq Al-Awsat
Lebanese Central Bank Rejects Proposals to Invest Gold Reserves
The sharp rise in the market value of Lebanon's gold reserves has sparked renewed debate over their potential use to support the country's financial recovery. However, the central bank remains firm in its stance against any move to liquidate or invest the reserves, citing strict legal restrictions and the risks of mismanagement. A senior financial official, speaking to Asharq Al-Awsat, acknowledged the significance of these discussions, particularly as the central bank's updated figures estimate Lebanon's gold holdings at around $28 billion. However, he emphasized that before considering any new policies, a full qualitative audit of the reserves is necessary to determine their exact value, weight, and historical origins. Lebanon officially holds approximately 286.8 tons of gold, or 9.25 million ounces. This reserve was accumulated under the 1963 Monetary and Credit Law to back the Lebanese lira. Currently, two-thirds of the gold is stored securely at the central bank in Beirut, while the remaining third is held at Fort Knox in the United States. Despite the growing interest in leveraging this asset, Lebanese law strictly prohibits any direct or indirect transaction involving the gold. Law No. 42 of 1986 mandates that any sale, leasing, or investment of the reserves must receive explicit approval from Parliament. Acting Central Bank Governor Dr. Wassim Mansouri has reaffirmed this restriction, stating unequivocally: 'No matter what happens, I will not sign off on moving even a gram of gold.' Mansouri also highlighted the dangers of using reserves irresponsibly. Before Lebanon's financial collapse in late 2019, the central bank held around $33 billion in foreign currency reserves, while gold reserves were valued at $16 billion. The cash reserves were largely depleted through unsustainable subsidy programs, leaving only $8.5 billion today. 'We lost one and a half times the value of our gold, and it didn't solve anything. The idea of using gold is simply not an option,' he said. While some policymakers argue that investing the gold could generate much-needed revenue, financial experts warn that without proper governance, such a move could lead to further mismanagement. Instead, they stress the need for deeper economic and institutional reforms. A key priority is securing an agreement with the International Monetary Fund (IMF) to ensure financial discipline, transparency, and oversight. Any decision regarding the gold reserves would require parliamentary approval and a clear, well-justified plan. However, financial experts argue that Lebanon already possesses vast state-owned assets that, if managed properly, could help close the country's estimated $72 billion financial gap. These assets include coastal and riverfront properties, 850 million square meters of state-owned land, high-value real estate in Beirut and other cities, as well as key infrastructure such as electricity, water, telecommunications, ports, and transport networks. Many of these resources remain underutilized due to corruption and inefficiency.
Arab News
12-03-2025
- Business
- Arab News
Financial reform plan can unlock foreign support for Lebanon, IMF says
BEIRUT: A unified financial reform plan will allow Lebanon to overcome its economic issues and unlock foreign funding, the head of the IMF's mission to the country said on Wednesday. Ernesto Ramirez Rigo was speaking in a meeting with President Joseph Aoun, who said that Lebanon was 'committed to moving forward with implementing reforms.' Negotiations between Lebanon and the IMF aim to pave the way for essential reforms to put the country on the path to financial recovery. It follows worsening financial and economic crises that Lebanon has been grappling with since 2019 due to economic mismanagement, rampant corruption and accumulated debt. Presidential media adviser Najat Charafeddine told Arab News: 'The IMF delegation emphasized that Lebanon's proposed plan must be approved by all relevant parties in order to pass in parliament. Implementing reforms will enable Lebanon to receive aid, including grants, particularly from countries with close ties, the delegation said. 'Achieving the plan will serve as an IMF seal of approval that will unlock assistance,' Lebanese officials were told. The delegation also highlighted 'the necessity of Lebanon returning to the fundamentals, particularly in restructuring banks and revisiting banking secrecy laws, which have yet to see the light of day due to disagreements.' Over the past two days, specialized technical meetings have continued between experts from the IMF and a World Bank delegation, along with directors of departments and specialized experts at the Lebanese Ministry of Finance. The talks aimed 'to reach conclusions on proposed issues to promote transparency in public finances and more comprehensive reforms,' a Ministry of Finance statement said. The IMF delegation met Prime Minister Nawaf Salam, Parliament Speaker Nabih Berri and Finance Minister Yassine Jaber to discuss the details of the economic plan and required reforms. Jaber said he discussed 'the priorities, namely the appointment of the governor of Banque du Liban, who will play a crucial role in working with the IMF. 'Preparations for reforms are ongoing to enable Lebanon to implement its financial plan,' he added, highlighting support for amending Lebanon's Monetary and Credit Law. Jaber said: 'The issue of frozen deposits in banks will be addressed in stages, and as minister of finance, I have no authority over the banking sector.' Ousmane Dione, World Bank VP for the Middle East and North Africa, who met Jaber in Beirut in late February, had previously called on the Lebanese government to implement reforms. This would 'ensure credibility and transparency, reassure investors and improve the business environment,' he said. The IMF delegation will meet a technical committee at the Association of Banks on Thursday. According to media reports, the meeting will focus on 'the performance of the exchange market and the Banque du Liban's interventions, the banking restrictions on transfers and the authorization of certain outgoing transfers. 'This is seen as an attempt to monitor Lebanon's cash economy, which has flourished since the country's financial collapse.' Meanwhile, diplomatic pressure exerted by Lebanon on the five-member committee overseeing the implementation of the ceasefire agreement between Hezbollah and Israel led to the release of four captives held by the latter on Tuesday evening. The development was welcomed by Hezbollah supporters. Israel is set to release a fifth person, a Lebanese soldier, on Wednesday evening, after he underwent surgery in an Israeli hospital. It follows the release of four Lebanese captives a day earlier. On social media, activists supporting Hezbollah celebrated the release of prisoners held by Israel for three months as a result of 'diplomatic, not military, efforts.' One activist claimed that President Joseph Aoun 'had achieved what 100,000 rockets failed to accomplish,' while another said: 'Diplomacy succeeded in releasing five prisoners, and tomorrow it could resolve the issues surrounding the disputed border points.' Axios quoted a US official on Tuesday: 'The Trump administration had been mediating between Israel and Lebanon for several weeks with the aim of strengthening the ceasefire and reaching a broader agreement. 'All parties are committed to upholding the ceasefire agreement in Lebanon and fulfilling all its conditions. We look forward to convening swift meetings of the working groups regarding Lebanon to address the outstanding issues. Israel and Lebanon have agreed to initiate negotiations to resolve disputes concerning their land borders.' Six of 13 points remain unresolved since the establishment of the Blue Line following Israel's withdrawal from Lebanon in 2000. Additionally, Israel has yet to withdraw from five Lebanese hills it occupies in the border area following the recent conflict. Reporters in the south have said that the Israeli army has expanded its presence around the hills, where it has established military facilities. A joint statement issued by the US and French embassies in Lebanon and UNIFIL on Tuesday said: 'The ceasefire implementation mechanism committee will continue to hold regular meetings to ensure full implementation of the cessation of hostilities.' Israeli Channel 12 quoted an Israeli politician as saying: 'Discussions with Lebanon are part of a broader and comprehensive plan. Israel aims to achieve normalization with Lebanon. 'The prime minister's policy has already transformed the Middle East, and we wish to maintain this momentum and reach normalization with Lebanon. 'Just as Lebanon has claims regarding the borders, we also have our own border claims ... we will address these matters.'
