Reforming the status of banks in Lebanon and reorganizing them in front of the cabinet today

According to the sources, there will be a real work to pass this project and its approval in the House of Representatives, because it is a prerequisite for reform and the basic entrance to negotiate with the International Monetary Fund, before the Lebanese delegation went to the United States of America in the last part of this month.

On the eve of the session, before noon in the Bank of Lebanon, a receipt and delivery ceremony between the ruler of the Bank of Lebanon, Wasim Al -Mansouri and the ruler of the Bank of Lebanon, Karim Saeed, will take place in the Bank of Lebanon.

Al -Akhbar wrote: The Cabinet is studying at its session today, a draft law prepared by the Ministry of Finance entitled “Reforming the situation of banks in Lebanon and reorganizing them.”

Any written from its title is also read, this project completely separates the process of distributing losses from the classification of banks and determining the conditions of their continuity, merging or liquidating them.

Distributing the losses in the custom of this government is a deferred process, which is directly subject to the dictates of the International Monetary Fund, which imposed that the government will pass this law in this form before the “spring meetings” of both the World Bank and the International Monetary Fund in late April.

Is it possible to deal with the budget of bankrupt banks as if it has not been bankrupt yet? Doesn’t it have employment in the Bank of Lebanon that are unable to withdraw it? Are these employments no losses? Should the IMF teach us how we should deal with losses, or is local rules and regulations covered this?

According to the sources, representatives of the fund stipulated that the Lebanese government take three basic steps before the spring meetings at the end of April.

Among these steps is the approval of a framework law to address banking conditions, as well as amendments to the Banking Secret Law and a law related to the Reconstruction Finance Fund.

Indeed, the Lebanese government is going “to hear and obedience” with what the fund demands, so what is related to the distribution of losses from the law of addressing the conditions of banks was separated as a suitable framework for the conditions of the fund, knowing that the government approved in its previous session the other two conditions. The government is not ashamed to implement the dictates of the IMF, as it was stated in the reasons for these laws that they come as a demand for the fund.

Why was the distribution of losses from the law? Is this really possible? These questions are legitimate, but it seems that the fund reached a conviction that Lebanon will not approve a law to address the conditions of banks and restore balance to the financial sector, except by force, and that the opportunity today is under the pressure that resulted from the imbalances of the balance of power after the Israeli war on Lebanon, in order to narrow the screws on the cache economy that is flying away from the banking sector.

Therefore, it seems that the priority and importance are now given to reorganizing the banking sector and launching it in isolation from those opinions that talk about “accountability” or about the necessity of excluding a large number of banks or replacing them with new foreign banks.

Therefore, a law can be issued that regulates the conditions of banks and classifies them in preparation for the resumption of their work and then the next step that relates to exclusion or replacement after integration and liquidation. The classification will be on the basis of evaluation. Consequently, liquidity and solvency accounts will be based on the fact that the deposits or money that banks employ with the Bank of Lebanon are not losses. Consequently, what corresponds to the deposits of people is also no losses! So, can banks return them to depositors upon request: of course not. Is it not strange?