Mansouri: The central bank cannot replace entire state to solve Lebanon’s crisis

Lebanon Economy
2023-09-29 | 03:40
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Mansouri: The central bank cannot replace entire state to solve Lebanon’s crisis
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4min
Mansouri: The central bank cannot replace entire state to solve Lebanon’s crisis

Acting Governor of the Central Bank of Lebanon, Wassim Mansouri, spoke about the conditions of banks and the haircut. He clarified that "the Central Bank of Lebanon has today Circular 158, which is practically effective, and he issued a clarification about this circular recently to explain the mechanism of withdrawals for depositors." He noted that this circular, like all circulars, is not ideal, and there are certainly criticisms from various sides, based on the reviews he has received.
Mansouri’s comments were made after meeting with Joseph al-Kosseifi, the head of the Lebanese Press Editors Syndicate, and members of the syndicate's council, whereby he noted that "the central bank cannot replace the entire state to solve a crisis the size of the financial crisis Lebanon is going through. The World Bank says that the crisis in Lebanon has not been witnessed by the world in 150 years.”
“Doesn't a crisis like the one we are experiencing today deserve all Lebanese politicians to act to solve it, putting aside all their disputes and conflicts for the sake of Lebanon and resolving people's issues?” he added.
Mansouri stressed also that postponing the solution to thei nternal problems is what led to the crisis we are experiencing today.
“Therefore, I said and repeat that the reserves of the Central Bank cannot be touched from August 1, 2023, and onwards. Is the existing reserve in the bank today sufficient to solve the depositors' problem in Lebanon? The answer is negative. The reserve cannot solve the entire problem.” He added.
“Could this reserve be a suitable basis for finding solutions? I say: Certainly, especially if you add to the central bank's reserve, the reserves of banks through the process of restructuring the banks as it should be. We must have a roadmap for a solution that can be relied upon,” he explained.
Mansouri affirmed that "the central bank does not have solutions to the depositors' crisis, and it should not have solutions because it is not within its jurisdiction. A financial crisis like the one we are experiencing in Lebanon requires legislation. Can the central bank compel the state to pay the money? And can it compel the banks to pay the money? I am ready to work day and night with the parliament and the government to find solutions, and if the solution is not like this, let's look for other legal ways, through improving the situation of depositors, and this happens with working on the recovery of the banking sector. I say to you openly, I will not stand in the way of the depositor taking his deposit at a rate of 90,000 in Lebanese pounds if he feels that way, starting from the 2024 budget. But the solution is not here. There is no central bank in the world that issues circulars to rescue a financial crisis. The circulars issued are temporary and are not intended to replace the state."
 

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