Lebanese banker seeks cabinet with practical expertise amid crisis

Lebanon News
2020-09-30 | 05:46
High views
Share
LBCI
Share
LBCI
Whatsapp
facebook
Twitter
Messenger
telegram
telegram
print
Lebanese banker seeks cabinet with practical expertise amid crisis
Whatsapp
facebook
Twitter
Messenger
telegram
telegram
print
3min
Lebanese banker seeks cabinet with practical expertise amid crisis
Lebanon's next government needs ministers with practical experience in finance and other areas to restore confidence in the collapsing economy, the head of the banking association said after the latest bid to form a cabinet fell apart last week.

Banks have faced a crisis since last year after political unrest, slowing remittances and a foreign exchange liquidity crunch left the state struggling to finance a mountain of debt. Depositors have been frozen out of their dollar savings.

Adding to Lebanon's woes, the government quit after a huge port blast on Aug. 4 that devastated a swathe of Beirut. Efforts to form a new cabinet of non-partisan, specialist ministers have stumbled amid sectarian politics.

"The most important step is to reestablish confidence," Salim Sfeir, chairman of the Association of Banks in Lebanon (ABL), told Reuters on Tuesday at the headquarters of Bank of Beirut, which he also heads.

"All will depend on the new government and the expertise that its members will have," Sfeir said in his office, where glass shattered in the blast had only just been replaced.

The central bank has told banks to recapitalize and provision for losses on Lebanese Eurobond holdings, as well urging them to repatriate cash sent abroad by big depositors.

Sfeir said a central bank circular requested repatriated funds be blocked for five years, offering liquidity to support the private sector. The funds would be placed in a correspondent bank abroad not with Lebanon's central bank, he added.

He said the "ultimate target" was to secure the return of $4 billion to $5 billion.

France, which is leading international efforts to help Lebanon, has drawn up a policy roadmap, including implementing a capital control law approved by the International Monetary Fund.

Paris has said banks might have to accept that depositors would lose money, via what is called a "haircut" on deposits.

Sfeir said banks remained opposed. "The easiest formula is to have a haircut, but a haircut will create for you a social problem," he said.

Proposals by banks include setting up a fund to hold $40 billion in state assets to offer a guarantee to depositors.

"The state fund objective is to establish confidence as fast as possible to whoever is skeptical about the repayment of the deposits," Sfeir said, adding assets could still remain in state hands with income generated offering liquidity.
 
 
 
 
 
REUTERS
 
 
 

Breaking Headlines

Lebanon News

Lebanon

Bank

Economy

Finance

LBCI Next
Presidential elections 101: Who are the two candidates ahead of the next presidential elections session?
Pierre el-Daher, the man who defeated the Lebanese Forces
LBCI Previous
Download now the LBCI mobile app
To see the latest news, the latest daily programs in Lebanon and the world
Google Play
App Store
We use
cookies
We use cookies to make
your experience on this
website better.
Accept
Learn More