Lebanon’s Banking Sector on Brink of Collapse due to Corruption

A Decades-Long Scandal: Riad Salameh’s Mismanagement at Banque du Liban

Beirut - Lebanon’s once-thriving banking sector has been severely damaged by the corruption and mismanagement of the country’s central bank, Banque du Liban (BDL), under the leadership of former head Riad Salameh. Salameh is now facing financial crime investigations in six European countries, Lebanon, and an Interpol warrant.

A Pattern of Abuse

• Reckless Monetary Policies: During his 29-year tenure at BDL from 1993 to 2022, Salameh implemented policies that led to the mismanagement of public funds.
• Government Corruption: The Lebanese government’s failure to address corruption and reform the banking sector has left thousands of citizens without access to their savings, pushing many into poverty.
• Misuse of Public Funds: Salameh allegedly transferred approximately $330 million to Europe between 2002 and 2015 to purchase luxury real estate and assets in his name or those of four associates.

The International Community’s Response

The international community is closely watching the situation, with sanctions imposed by:

• United States: The US has imposed sanctions on Salameh and his associates.
• United Kingdom: The UK has also imposed sanctions on Salameh and his associates.
• Canada: Canada has imposed sanctions on Salameh and his associates.

A Path Forward

Experts say that meaningful reforms and accountability are necessary to restore trust in Lebanon’s institutions and ensure a stable future for its citizens. Some proposed solutions include:

• Repealing the Banking Secrecy Law: Economists and experts argue that repealing this law would be a crucial step towards combating corruption and restoring trust in Lebanon’s financial system.
• Independent Decision-Makers: The International Monetary Fund (IMF) has offered Lebanon a $3-billion aid package, but experts argue that independent decision-makers are needed to ensure economic stability rather than IMF assistance.