Central bank put 70% of depositor money at risk

In a statement, the Bloc noted that the sectarian parties, who have been ruling Lebanon over the last 30 years, are throwing accusations around about the dire state of the economic situation, some putting the full responsibility on Banque du Liban Governor Riad Salameh, who in turn responded to those accusations.

The Bloc agreed with the Governor’s obvious statement that he was not the one who spent the money lent to the government, and that he was not responsible for the deal, the waste, and the corruption.

The Bloc tackled two points that the Governor made in defense of himself:

The first point is his false statement about the Monetary and Credit Law binding the Central Bank to give loans to the government. The Government based his statement on Article 91, which states that "in the case in which it is proven that there is no other solution, and if the government insists, on its request, the central bank can grant the required loan."  The Bloc stressed that there is no binding wording in this law, and that the Banque du Liban according to the law could have given “fund facilities” that do not exceed 4 months, and certainly not 30 years.

The second point is about the Governor saying that the Central Bank paid interests that were equal to those paid by other countries suffering similar economic crises like Turkey and Egypt. The Bloc stressed that those countries did not get high interest loans from commercial banks, which is the case in Lebanon, because of the high risk of those loans.  Instead those loans were given by financial companies with investors being fully aware of the risks. The Bloc added that commercial banks do not have the right to make their depositors bear the brunt of such high risk loans, except with a small percentage of their assets.