Flawed Solutions: The Leaked Government Plan for Banking Crisis

In the previous part, we saw who bears responsibility for the crisis we face and how the state has absolved itself of its responsibilities. In this part, we will show you how insufficient the current approach is.

The government's plan to address the situation in the banks has leaked, but so far, no one wants to adopt it. The government claims that the project was prepared by the Central Bank of Lebanon and the Banking Control Commission, while they blame it on the government.

The new plan differentiates between qualified deposits, which were in place before October 17, 2019, and unqualified deposits, which entered the bank or converted from Lebanese pounds to dollars after that date.

Based on this, if your deposit is qualified, the plan will refund you up to $100,000 in cash for 10 to 15 years at a monthly rate of $500 per month. If your deposit is unqualified, you will receive a maximum of $36,000, payable over the same period at a rate of $300 per month.

As for financing, once again, according to the plan, the burden will fall on the banks and the Central Bank of Lebanon, with no contribution from the government.
This plan is not feasible:

Not in terms of financing, as long as the state does not carry out the required reforms and contribute to financing.

Nor in terms of legality, as the principle of deposit haircut is already contrary to the law according to the latest decision issued by the State Council.
The remaining points of the plan are also subject to much controversy...

To be continued.