A secondary entrances of the Banque du Liban in Beirut's Hamra neighborhood. (Credit: L'Orient Today)
BEIRUT — During the handover ceremony at Banque du Liban (BDL) on Friday, the institution's new governor, Karim Souhaid, urged all banks to gradually recapitalize based on international standards, adding that those unable to do so will need to merge or face liquidation — without jeopardizing depositors' rights.
'To preserve depositors' rights'
“All banks must increase their capital by gradually injecting new funds,” Souhaid said during his speech at BDL headquarters in Beirut. “Banks that cannot or do not want to merge must do so, and if they are unable to merge, they will be liquidated in an orderly manner, so as to preserve depositors' rights.”
Souhaid said he believes it is the responsibility of the state, the banks, and the central bank to repay deposits, prioritizing small depositors first, then medium and large depositors.
Lebanese banks have imposed illegal restrictions on deposits since 2019, following the country's economic and financial collapse, largely seen as the result of corruption and malpractice within the financial sector. Souhaid promised to ensure that BDL “remains independent in its decisions and free from any interference.”
“I will preserve the independence of BDL's work from political pressures and the influence of the banking sector and economic bodies,” he assured.
The position of BDL governor is traditionally reserved for a Maronite Christian. Karim Souhaid received the support of 17 out of the 24 ministers in Nawaf Salam’s government to succeed Wassim Mansouri, who served as interim governor from July 31, 2023, following Riad Salameh's 30-year tenure.
Souhaid's candidacy was opposed by the prime minister but supported by President Joseph Aoun, who considers him the best candidate to lead an institution discredited and tainted by a series of corruption scandals.