Wassim Mansouri: As long as the demands are not met, no one will be lent to

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2023-09-03 | 00:50
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Wassim Mansouri: As long as the demands are not met, no one will be lent to
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4min
Wassim Mansouri: As long as the demands are not met, no one will be lent to

The acting Banque du Liban (BDL) Governor, Wassim Mansouri, reiterated that "as long as the demands are not met, no one will be lent to."

Mansouri emphasized that there would be no compromise regarding the timing of financing the state.

This article was originally published in, translated from the Arab outlet of Al-Sharq Al-Awsat.
He stated, "I seek to restore the state's financial discipline. This decision is decisive and not easy, but I will not backtrack on it, even if a law is passed in parliament to borrow, and there are no reform laws in exchange, I will not spend the funds. It is my legal right. There is no law obliging me to pay. There is a law that allows me to use people's money to lend to the state, but I will not use people's money. I refuse to use it for a simple reason: if it is not coupled with reforms, it will be wasted."

Regarding depositors' funds, Mansouri stressed that "In the case of depositors' funds, people must be informed about the issue, and serious solutions must be worked on, and this can only be done through the laws I am calling for. The reform laws include capital controls, bank restructuring, and financial balance law. If completed, these three laws and a budget that reduces the deficit to the maximum can bring balance."

Since the crisis began and depositors' funds were trapped in banks, Lebanese citizens have lost trust in this sector and turned to a cash economy with many risks.

Mansouri told "Al-Sharq Al-Awsat," "The cash economy that the country is experiencing cannot and should not continue. As the BDL, I cannot endlessly buy dollars from the market. I must ensure the source of these funds. In the end, the cash economy will destroy the country. We need assistance. But if we don't help ourselves, who will help us?"

In an attempt to overcome this crisis, the BDL issued Circular No. 165, which allowed the opening of accounts in both dollars and Lebanese lira for "Fresh" money, aiming to shift the parallel market to the banking sector, enabling the central bank to monitor and ensure the source of funds in the country and activate anti-money laundering measures.

However, if no radical legal solutions are reached, allowing the banking sector to operate effectively, it will remain within the cash economy. Mansouri emphasized that all these aspects are interconnected, stating, "Reform laws are completed, the state's finances are regularized, depositors know how and when they will get their money, trust in banks is restored, and then this trust will encourage people to return some of their money to banks. This will allow the BDL, as the regulator of the banking sector, to impose stronger conditions to limit the cash economy and return to banking operations." He also warned that "the cash economy poses a danger to the state as a whole."

Mansouri firmly told his visitors, "Lebanon cannot continue to develop without relations with its natural Arab and Gulf surroundings. Everything you hear from friendly countries calls on us to find a political solution, and they will find us by their side. This file is not in my hands, but I must call for the completion of laws related to liquidity and reforms to rebuild the economy. If this sector is built, other matters will be resolved."

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