The Parliament of Lebanon last month partially raised the laws of banking secrecy in a rare step to encourage transparency and revive the scattered economy in the country.
Since the 2019 financial collapse that the war -torn country brought to its knee, the banking sector reform was a prerequisite for assistance from multilateral lending institutions. The new law, including independent auditors, allows direct access to banking records of the past decade.
“The Banking Secret Bill is a tool,” commenting, Sibylle Rizk, Director of Public Policy at Kulluna Irada, a Beirut -based research center. “Now it must be used: whether by banking authorities to restructure the sector, the judiciary, or through the tax administration.”
Since the collapse of 2019, the local currency has decreased by 98 %, and most Lebanese cannot reach their deposits. Banking losses are estimated at $ 76 billion, which raises the decisive question: Who will pay?
The production of an answer that satisfies many parties is now partially lies on Karim Souaid, the governor of Banque du Liban since March. Sweden’s nomination was controversial, as he claimed that he was urged by the banking hall.
On his first day in his post, he stressed the need to “gradually restore all bank deposits, starting with young savers.”
“It must be the priority of the new instant ruler is” the launch of bank audits to obtain an accurate image of assets and liabilities, “Rizk says.
She adds that none of these reforms will not be easy, but it is the key to opening negotiations with the International Monetary Fund, and re -establishing the ability of the banking sector to finance economic activity and tame the monetary economy, which has controlled since 2020.
“The Lebanese banking sector must re -communicate with the international financial system, rebuild relations with correspondence banks, restore access to global capital markets, and re -establish credibility,” says Wisam Fatou, Secretary of the Beirut Arab Banking Union.
But to restore their reputation and ensure the sheet, Lebanese banks will need new partners. Playing shareholders may increase the risks, but regional and international banks must also intervene.
