The Governor of the Bank of Lebanon, Karim Saied, stressed that the Central Bank is neither an opponent of the government nor affiliated with it, stressing that the first duty of the independent Central Bank is not to oppose the government, but rather to maintain the discipline that ultimately protects it from the consequences of its transgressions.
Saeed explained, during a massive meeting at the headquarters of the Maronite League headed by its president, Engineer Maroun Al-Helou, that when a state loses monetary discipline, not only does its currency weaken, but also confidence, investment, growth, and the economy weaken, wealth dissolves and savings evaporate.
He pointed out that the goal of the independence of the Central Bank is to ensure the existence of a single institution within the constitutional structure of the state capable, when necessary, of saying “no,” explaining: “No to excessive borrowing. No to financing the structural deficit through monetary issuance. No to inflationary financing. No to short-term political interest when it threatens long-term national stability. No to lending to governments without any restrictions, conditions, contract, or draft contract from the funds of others, that is, from the funds of depositors specifically.”
Saeed stressed that Lebanon did not fail financially because it lacked laws, but rather because it gradually stopped respecting them, considering that the most important and complex legislation is the financial regulation and deposit repayment law, which is in the process of being studied between the government and the International Monetary Fund, with the Central Bank participating in some of its aspects from time to time.
He stressed that this law will not receive the support of the Bank of Lebanon if it is not based on firm legal foundations, a realistic economic approach, and true social justice.
He pointed out that among the basic objectives of this law is for all parties – that is, the state, the central bank and commercial banks – to bear the economic burdens of the crisis, while sharing the obligations between them in a realistic and fair manner.
He also stressed not to impose a high cost on depositors, especially small depositors, i.e. those below $100,000, and to benefit from the fastest payment methods according to the availability of liquidity.
Saeed stressed the need to give the Lebanese banking sector, before others, a real opportunity to recapitalize and restructure, in order to continue providing services and participating in the process of economic advancement.
He concluded by emphasizing the need to hold all those who carried out suspicious transactions accountable, and to recover the stolen funds to increase the liquidity reserve in order to repay deposits.
