BDL Governor Karim Souhaid. Illustration by L'Orient- Le Jour.
Who should sit on the Higher Banking Authority, the body tasked with steering the restructuring of a sector that is depleted, illiquid and insolvent? For several weeks, this question has been at the heart of the institutional standoff still unfolding around the banking resolution file. On one side, Banque du Liban (BDL) is determined to retain full control over the process. On the other, the government is struggling, at times clumsily, and in ways still seen as problematic by the IMF, to establish a more balanced body, one capable of breaking BDL’s historic dominance, since the central bank is widely accused of being the epicenter of the crisis.But this push for reform quickly ran up against the intransigence of BDL Governor Karim Souhaid, who remains firmly opposed to Article 5 of the draft law, which defines the authority’s...
Who should sit on the Higher Banking Authority, the body tasked with steering the restructuring of a sector that is depleted, illiquid and insolvent? For several weeks, this question has been at the heart of the institutional standoff still unfolding around the banking resolution file. On one side, Banque du Liban (BDL) is determined to retain full control over the process. On the other, the government is struggling, at times clumsily, and in ways still seen as problematic by the IMF, to establish a more balanced body, one capable of breaking BDL’s historic dominance, since the central bank is widely accused of being the epicenter of the crisis.But this push for reform quickly ran up against the intransigence of BDL Governor Karim Souhaid, who remains firmly opposed to Article 5 of the draft law, which defines the authority’s...