Salameh Rules Out 'Collapse', Says No Bank Will Go Bankrupt
09 January 2020
Central Bank Governor Riad Salameh on Thursday ruled out an imminent financial collapse in the country as he reassured that no bank will go bankrupt.
Speaking to broadcaster MTV in his first extended remarks in nearly two months, Salameh said that foreign support was needed to pull the country from crisis and that Qatar appeared open to offering help.
“I believe the Qataris want to support Lebanon,” he said, referencing a recent visit he made to Doha, before adding: “Contact between the two states is not the responsibility of the central bank.”
Salameh said that contact with the International Monetary Fund (IMF) had so far been limited to talks with the prime minister over technical support.
“There has been no negotiation with the IMF by the Lebanese state to really know what conditions they would put,” he said.
“Not a single bank will go bankrupt and banks facing difficulties will be merged,” he added.
Noting that liquidity in the country has declined due to “the pressure created by depositors,” Salameh reassured that Lebanese banks enjoy solvency.
“There won't be a haircut,” the Governor answered in response to a question.
“The central bank does not have the jurisdiction to carry out a haircut; this needs a law,” he reminded.
He added: “Banks must be allowed to ‘breathe’ and we have devised a plan under which depositors' money will be preserved.”
“I want to fix things and reassure the Lebanese about their monetary situation,” Salameh went on to say.
Pointing out that it is his responsibility to “preserve the current structure” and the “continuity of the Lebanese state,” Salameh noted that the central bank had financed the state “on the hope that there would be reforms.”
Asked about the latest reports about the alleged transfer abroad of huge sums of money by a number of politicians, Salameh said: "We'll send teams from the central bank's Special Investigations Commission to the banks to explore the outcome of investigations into the transfers and we will then send the result to the state prosecutor so that he takes the necessary measures."
Salameh also ruled out a "revolution of the hungry," but noted that poverty is expected to increase, urging measures.