Souaid visits Maronite League: successful reforms will require multilateral international support
Central Bank Governor Karim Souaid visited the Maronite League at the invitation of its Executive Council and Economic Committee.
The visit aimed to discuss the role of the Central Bank’s leadership during this phase in helping Lebanon emerge from its monetary crisis, restore its national currency, reform the banking sector, and recover depositors’ funds.
At the beginning of his speech, Souaid thanked the Maronite League, its Executive Council, and its Economic Committee for inviting him. He also praised the speech of the League's President, Ambassador Karam, for its accurate description of the current situation.
Regarding independence of the Central Bank, he indicated that the Banque du Liban, like central banks worldwide, is legally fully independent from political authority and the interests of the private sector, as well as from the public interest and the smooth functioning of state institutions. Therefore, it is not permissible to undermine this independence; rather, it is imperative to preserve it, especially as Lebanon embarks on a long journey of reconstruction and restructuring its economy and financial system. Cooperation with the authorities is a key factor in the success of the entire desired recovery process.
In the second axis, Souaid considered that the current crisis is, by its nature, a systemic crisis resulting from the accumulation of public debt over many years, during which banks made excessive investments and placements in sovereign debt, amidst the Central Bank of Lebanon's lax enforcement of regulations. Recognizing the necessary systemic nature constitutes an entry point for addressing it. Addressing this crisis requires, on the one hand, reducing the burden on the Central Bank of Lebanon's budget and, on the other hand, launching a phased deposit return plan with the goal of returning depositors' funds (within a reasonable timeframe).
Based on the shared responsibility of the concerned parties, the Governor emphasized that the state, the Central Bank and commercial banks must bear responsibility.
