The CEO of the Bank of Beirut, Salim Sfeir, has been re-elected as the head of the Association of Banks in Lebanon. This will be a second consecutive term, his first term – he was elected in 2019 – having been marked by the collapse of the Lebanese financial sector and the establishment of informal capital controls, considered illegal by many and causing significant incidents at the time between depositors and employees of local banks.
He would thus have obtained this victory against 2 other candidates including Jean Riachi, CEO of FFA Private Bank.
As such, Salim Sfeir failed the implementation of the plan of the government Hassan Diab following the state of default of the Lebanese Republic. He then refused the magnitude of the estimated losses of the banking sector. He went so far as to present, via the Association of Banks in Lebanon, an alternative plan while the International Monetary Fund confirmed the accuracy of the figures presented by the Lebanese government in April 2020 before activating the networks of banks in inside the parliament. As a reminder, 43% of bank shares belong to local politicians.
Since the negotiations with the IMF are still frozen pending a new Lebanese government while the Lebanese banks are accused, on the one hand of having lied about the magnitude of their losses which could exceed 100 billion dollars according to Standard & Poor’s for 143 billion dollars of deposits in March 2021, or to carry these losses on the funds held by the depositors and not on the capital of their shareholders.
Thus, in the event of withdrawal in dollars, depositors could withdraw only the equivalent in Lebanese pound up to the parity rate of 3,900 LL / USD until the cancellation of circular 154 of the Banque du Liban by the council of state, forcing the central bank to adopt circular 158 allowing the withdrawal of 400 USD in foreign currency and the equivalent of 400 USD at the rate of 12,000 LL / USD.
In addition, Lebanese banks are regularly accused of failing to respect judicial decisions allowing the withdrawal of foreign currency or even less the legislative texts having made it possible to establish a dollar for the benefit of Lebanese students abroad.
This news also comes the day after an incident that took place between members of an association and employees of the branch of the Lebanon-Swiss bank in Hamra. The Association of Banks in Lebanon has therefore decided to close all financial institutions today.
