Reshaping the script: Reform trajectories emerging from the BDL audit

News Bulletin Reports
2023-08-22 | 10:09
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Reshaping the script: Reform trajectories emerging from the BDL audit
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3min
Reshaping the script: Reform trajectories emerging from the BDL audit

One of the most prominent findings revealed by the forensic audit report at Banque du Liban is that Riad Salameh wielded power on his own, in the absence of accountability, and due to the ineffectiveness of the bank's council.

The forensic audit report mentioned that "governance and accountability must be improved to mitigate mismanagement in the future."

Based on this, caretaker Prime Minister Najib Mikati tasked a committee composed of the Ministers of Justice and Finance, along with experts, to introduce amendments to the 1963 Monetary and Credit Law.

There have not been significant amendments since then, and the purpose of these changes was to establish principles of proper accountability and to set controls on the BDL governor's actions without interfering with the essential aspects of the law.

The committee held a preparatory meeting, and the work will begin early next week.

So, what could be the new amendments to the Monetary and Credit Law?

- Imagine that in the law, the governor of the Central Bank of Lebanon is also the head of the Higher Banking Authority, which investigates and adjudicates violations in the financial sector. It's as if the governor is also the judge. This is one of the points that, according to observers, could be amended.

- Similarly, the issue of the presidency of the Special Investigation Commission, which investigates money laundering operations and was chaired by Salameh.

- Among the proposed points, amending the article related to state borrowing in necessary cases in a way that a clear contract specifies the amount, duration, and importantly, prevents lending to the state in foreign currency.

- Granting complete independence to the Banking Control Commission, most of whose decisions were subject to BDL governor's approval.

- Enforcing greater participation of BDL council members in decision-making, composed of the four deputies of the governor and the directors-general of the finance and economy ministries.

However, these are examples of suggestions that the committee will examine.

But, will the path be easy politically, considering all these points aim towards limiting the governor's powers?
 

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