- Title: Lebanon new c.bank chief aims to revive banks, counter terrorism financing
- Date: 4th April 2025
- Summary: PRESS CONFERENCE ATTENDEES SEATED MANSOURI TALKING TO SOUAID DURING NEWS CONFERENCE (SOUNDBITE) (Arabic) LEBANON'S NEW CENTRAL BANK GOVERNOR, KARIM SOUAID, SAYING: "Lebanon's (Central) Bank will work to combat all forms of money laundering, terrorist financing, drug trafficking, cross-border smuggling, currency counterfeiting, and the illicit spread of cash in the economy.
- Embargoed:
- Keywords: CENTRAL BANK ECONOMY KARIM SOUAID LEBANON
- Location: BEIRUT, LEBANON
- City: BEIRUT, LEBANON
- Country: Lebanon
- Topics: Middle East,Government/Politics
- Reuters ID: LVA003421904042025RP1
- Aspect Ratio: 16:9
- Story Text: Lebanon's new central bank governor said on Friday (April 4) commercial banks must recapitalise, merge or be closed as he outlined plans for reviving the paralyzed financial system, saying that small depositors would be prioritized in recovering their funds.
Karim Souaid also said the central bank would counter terrorism financing and eliminate the parallel economy as it seeks to get Lebanon removed from a global financial watchdog's "grey list" of states requiring special scrutiny.
Souaid takes over Banque du Liban with Lebanon still suffering the repercussions of a financial crisis that began in 2019, when decades of profligate spending and corruption led the state to default on its huge debt, the currency to collapse, and the banking system to seize up.
His appointment is part of a major shake-up of Lebanese officialdom that followed last year's war between Israel and the Iran-backed Hezbollah, an armed group that long had major sway over state affairs but was badly weakened by the conflict.
Souaid said the central bank would work to reschedule the public debt and pay back depositors, while calling upon private banks to gradually raise their capital by injecting fresh funds.
Those banks unable or unwilling to do so, should look to merge with other institutions. Otherwise, they would be liquidated in an orderly manner, with their licenses revoked and depositors' rights protected, he said.
"The priority must be to pay the funds of the small depositors," he said. Commercial banks, BdL and the Lebanese state must bear their responsibilities in paying depositors, he added.
Losses in Lebanon's financial system as a result of the 2019 collapse are estimated at some $72 billion.
Successive governments made little to no progress in enacting reforms to revive the economy since the collapse, with vested interests widely blamed for blocking change. The World Bank in 2022 said the collapse had been orchestrated by the ruling elite that had long exploited state resources.
The new government, led by Prime Minister Nawaf Salam, has requested a program with the International Monetary Fund, which says Lebanon needs a comprehensive strategy for rebooting its economy.
Souaid pledged to safeguard the central bank's independence from political pressure and prevent conflicts of interest.
(Production: Ahmad al Kerdi, Joelle Kozaily) - Copyright Holder: REUTERS
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