Banque du Liban Holds Meetings in Paris to Discuss Financial Stability Law and Deposit Recovery

The Banque du Liban announced in a statement that it held a series of closed consultative meetings in Paris on October 27 and 28, attended by several banks selected by the Association of Banks in Lebanon, along with the bank's financial advisors, specifically Rothschild & Cie, to discuss fundamental issues related to the application of any future law for financial stability and deposit recovery.

The bank clarified that discussions focused on two main axes. The first addressed bank recapitalization and loss treatment, examining the requirements for recapitalizing banks to enable them to resume their future activities, as well as absorbing losses resulting from imbalances and irregular claims previously identified by the Banque du Liban, which will be determined according to the provisions of the anticipated law.

The second axis dealt with the assessment of current and future liquidity, exploring current and future liquidity levels in the banking system, including assets owned and held by both the Banque du Liban and the banks that are convertible into cash, with the aim of identifying actual resources available to meet obligations to repay depositors.

The Banque du Liban noted that the nature of these meetings did not require the participation of any other parties, contrary to what some uninformed media outlets promoted or reported as misleading information.

It affirmed that the topics raised fall exclusively within the scope of interest of the Banque du Liban and the banks, forming an integral part of the review and transformational assessment process conducted by the bank to determine the amount of money that can be returned to depositors and the realistic timeframes required for this, based on reliable, rational, and feasible grounds, preventing promises that exceed actual capabilities.

The Banque du Liban stressed that it considers banks full partners in the process of returning deposits to their owners, alongside the Lebanese state and the Banque du Liban itself, and views them as the primary driver of future economic recovery, since economic prosperity or sustainable growth cannot be achieved without an effective credit cycle enabling institutions and individuals to obtain the necessary financing for investment, production, and economic activity.

In a related context, the bank revealed that the Governor of the Banque du Liban, who participated in part of the aforementioned meetings, conducted a series of high-level consultations and meetings in Paris, including with the Governor of the Bank of France, and officials at the US Treasury Department concerned with anti-money laundering and counter-terrorism financing.

The meetings also included several law firms acting on behalf of the Banque du Liban to follow up on multiple lawsuits in France and other countries against former bank officials and their associates, regarding cases involving embezzlement of funds from the Banque du Liban, fraud, and illicit enrichment.