Mansouri says Central Bank cannot replace state to resolve Lebanon’s financial crisis

Acting Governor of the Lebanese Central Bank Wassim Mansouri gave a briefing on the condition of banks in Lebanon.

“The Central Bank has issued Circular 158, which is practically effective,” Mansouri said, adding that he has recently issued a clarification about this circular to explain the mechanism of withdrawals for depositors.

“This circular, like all circulars, is not ideal, and there are certainly criticisms from various sides,” Mansouri added, based on the reviews he has been receiving.

Mansouri’s briefing came during a meeting with head of the Editors’ Syndicate, Joseph al-Kosseifi, to whom he noted that "the Central Bank cannot replace the entire Lebanese state to resolve the Lebanese financial crisis,” adding that according to the World Bank, the Lebanese economic crisis is unprecedented in the world’s new history.

“Doesn't a crisis like the one we are experiencing today deserve all the Lebanese politicians’ efforts to solve it?” Mansouri wondered.

“Therefore, I’ve said and I repeat that the reserves of the Central Bank cannot be touched starting August 1, 2023, and onwards. Is the existing reserve in the bank today sufficient to solve the depositors' problem in Lebanon? The answer is negative. The reserve cannot solve the entire problem,” he added.

“Could this reserve be a suitable basis for finding solutions? I say certainly, especially if the Central Bank's reserve is added to that of other banks through the process of restructuring the banking sector. We must develop a roadmap for a solution that can be relied on,” he explained.

Mansouri finally affirmed that the Central Bank did not have solutions to the depositors' crisis, and it “should not have solutions because it is not within its jurisdiction.”

“A financial crisis like the one we are experiencing in Lebanon requires legislation. Can the Central Bank compel the state to pay the money to depositors? Can it push banks to follow suit? I am ready to work day and night with the parliament and the government to find the required solutions,” Mansouri concluded.