Lebanon's caretaker prime minister warned Saturday that the country was quickly headed toward chaos and appealed to politicians to put aside differences in order form a new government that can attract desperately needed foreign assistance, the Associated Press reported. Hassan Diab, who resigned almost seven months ago as prime minister, threatened to suspend his caretaker duties if that would increase pressure for a new Cabinet to be formed.
Lebanon’s parliament passed a law on Monday to lift banking secrecy for one year in a move that could clear the way for a forensic audit of the central bank, a key condition for foreign aid that has hit a roadblock, Reuters reported. Such an audit is on a list of reforms that donors have demanded before helping Lebanon climb out of a financial crisis without precedent. These include steps to tackle corruption, a root cause of the meltdown that has crashed the currency and triggered a sovereign default.
Lara Mustafa and Wassim Hachem are among thousands of university students caught up in Lebanon’s financial crisis, which started in 2019 with popular protests against leaders whom demonstrators blamed for corruption and mismanaging the economy, Reuters reported. An insolvent banking system, which had lent more than two thirds of its assets to the central bank and state, shut out all depositors from their dollar accounts, and Lebanon defaulted on its debts. The COVID-19 pandemic added to mass job losses and business collapses. Lebanon traditionally prides itself on its education system.
Restructuring consultancy Alvarez & Marsal has pulled out of a forensic audit of Lebanon’s central bank because it did not receive information required to carry out the task, caretaker Finance Minister Ghazi Wazni told Reuters on Friday, Reuters reported. The decision is a blow to Lebanon as it attempts to extricate itself from a financial crisis, rooted in endemic waste and corruption, that has crashed its currency, paralysed banks and prompted a sovereign debt default.
A Lebanese judge has ordered a protective freeze on some property assets of SGBL bank, its CEO and two board members in a case filed by a Jordanian businessman seeking repatriation of millions of dollars in deposits, a judicial document showed, Reuters reported. It was the first such move in cases brought against Lebanese lenders by customers seeking access to dollar deposits frozen under informal capital controls. The curbs, imposed by the banks in late 2019, also largely blocked customers from making transfers abroad.
Lebanon’s caretaker Finance Minister Ghazi Wazni announced on Thursday a three-month extension of a deadline to provide all data required for a forensic audit of the central bank after it declined to submit some information, citing bank secrecy laws, Reuters reported. The caretaker prime minister and three sources familiar with the matter have said that Banque du Liban (BDL) was withholding information needed by restructuring consultancy Alvarez & Marsal to begin the audit, which is a key demand for foreign financial assistance to help Lebanon exit a financial meltdown.
The Lebanese central bank’s refusal to provide full data for a forensic audit may force consultancy Alvarez & Marsal (A&M) to walk away or wait for a new cabinet to salvage the review, a key condition for foreign aid, two sources close to the matter said, Reuters reported. Banque du Liban (BDL) said in a statement on Wednesday that it had provided its own accounts to the turnaround specialist hired by Lebanon this year, but that it should be the government that submits full state accounts to the audit.
Restructuring consultancy Alvarez & Marsal has yet to receive all the information it has requested to conduct a forensic audit of Lebanon’s central bank, according to three sources familiar with the matter, Reuters reported. The Lebanese government hired the turnaround specialist this year to audit the central bank as the country grapples with a financial meltdown on a scale it has never seen before. Alvarez & Marsal declined to comment.