The exclusion of isolating Lebanon from the global financial system simply to accuse Salameh.. but there is no solution yet to the crisis of the vacuum in the helm of governance

The exclusion of isolating Lebanon from the global financial system simply to accuse Salameh.. but there is no solution yet to the crisis of the vacuum in the helm of governance
The exclusion of isolating Lebanon from the global financial system simply to accuse Salameh.. but there is no solution yet to the crisis of the vacuum in the helm of governance

When the news, whether information or rumors, was issued in the media, locally and internationally, against the Banque du Liban and its ruler, or against some banks, those in charge of the banking sector were ready, and the first among them was the Governor of the Banque du Liban, to clarify that these news or accusations related to facilitating money laundering operations or banking abuses or embezzlement from Public money is just rumors and unproven and accurate information, and it is in the context of an attempt to hit the banking sector, and they warn that such news harms the sector’s work, its international classification, and its relations with correspondent banks abroad, and affects confidence in the sector.

What now that the accusations started rolling in?

These warnings were repeated with the issuance of any report or press article. But today, the news that turned into accusations leading to the issuance of an arrest warrant against the Governor of the Banque du Liban, Riad Salameh, is no longer fleeting and can be denied through statements, but has become official at the level of all countries of the world. Thus, how will the banking sector face it and how will it affect its relations and its work, in light of the worst stage that banks are going through that no longer have any weapons to use, and they are in a state of financial bankruptcy and accused of squandering 100 billion dollars of depositors’ money, and are threatened with disappearance after granting licenses to new banks, what According to the Secretary General of the Association of Banks, Fadi Khalaf, it means “creating a new banking sector and eliminating the current banking sector with its deposits.”

And if accusing a single Lebanese bank of violating international banking laws and putting it on black lists leads to severing all international relations and financial dealings with it, then how is it rather to accuse a central bank governor who regulates and monitors an entire banking sector and formulates circulars and decisions related to his work?

Although Salama’s mandate ends after two months, some of those concerned with the sector consider that the government must take a decision on this issue, and that Salama must submit his resignation and devote himself to defending himself locally and abroad.

Long: bad reversals that cannot be accurately determined today

In this context, the banking expert, Samir Taweelah, saw that the judicial mechanism that was launched against Salameh is still in its early stages, as the arrest warrant is linked to his failure to appear before the court, that is, it is still centered on form rather than content, and therefore a verdict of conviction or innocence has not yet been issued. But regardless of whether the arrest warrant is related to the form or the content of the case, the accusation of a central bank governor of a distressed banking sector will have very bad repercussions that cannot be determined at present, and may be translated into the accounts of banks and the central bank with correspondent banks abroad in New York and Europe. Tawila pointed out that the most important reflection will be related to the banks’ relationship with correspondent banks and how they deal with them, especially since the relationship is currently characterized by reservation and strictness.

Speed: Beware of the spread of money laundering

In turn, the banking expert, Dr. Joe Soroue, instead of calling on Salameh to resign, and so on, expedite the election of a president and government, appoint a new governor for the Central Bank, and put an end to the utter chaos on the financial, monetary, and economic levels. Addressing the crisis of the banking sector, which is threatened with extinction, and determining the fate of deposits before starting to grant licenses to new banks. Considering that the repercussions on the relationship of the central bank and banks with correspondent banks will not be affected by the persecution of the ruler on a personal level, but rather by the growth of the monetary economy, which has become equivalent to about 60 percent of the gross domestic product and amounts to 10 billion dollars, and what is reinforced by the prosperity of money laundering operations.

Sarou’ confirmed to “Nidaa Al-Watan” that it is the spread of money laundering operations that will sever our relations with correspondent banks, especially with the anticipation of a bad rating for Lebanon in this context in the next two days.

Hammoud: What is happening is within the framework of the preliminary judicial procedures

For his part, the former head of the Banking Control Commission, Samir Hammoud, considered that the French memorandum against the Governor of the Banque du Liban resulted from a foreign judicial decision, which also requires that it be referred to the Lebanese judiciary for study before making a decision to implement, “even if the decision to prosecute is circulated to Interpol.” Explaining that the effects of the arrest warrant are divided into two parts, the first is purely judicial and the second is bank-monetary.

From a legal point of view, Hammoud indicated to “Nidaa Al-Watan” that what is happening today in the judiciary comes within the framework of the preliminary procedures that, in the language of the courts, require going through three stages: prosecution, investigation, and judgment, “noting that we are still in the first stages that include appeal.” And the response and defenses, and this is what is happening today with the issuance of prosecution decisions.

Hammoud regretted that more than a month ago, it was reported in advance by foreign and local sources, the news of the issuance of an arrest warrant against Salama and its circulation to Interpol, specifying the exact date for that, i.e. on May 16, “which is contrary to judicial laws.”

As for monetary banking, he saw that in light of Lebanon’s suffering from an unprecedented economic and financial crisis, and with the possibility of the entire banking system being destroyed, the rights of depositors lost, and the absence of proper banking work, and at a time when the country suffers from a presidential vacuum, a caretaker government, and the controversy surrounding The authority of the caretaker government to appoint a new governor of the Central Bank, the real crisis is not related to the issue of Salama’s conviction or innocence two months before the end of his term, but rather to the crisis of the banking system, the banking sector and the country as a whole.

Good relationship with JPMorgan Bank.
Hammoud believed that the crisis goes beyond the issue of Salameh’s conviction, because the banking system is threatened in several ways, the latest of which is the new reservation by correspondents about Lebanese banks, and their bad relationship with them, which stands on the brink of the abyss, although some banks and the Central Bank still enjoy a good relationship with correspondents, especially with JPMorgan Bank.

He added, “Since the governor’s mandate ends after two months, and since the judicial procedure is a preliminary procedure subject to appeal and not a final judgment of conviction, and therefore I believe that there will be no direct and quick reaction by correspondent banks to Lebanese banks or even to the Central Bank, because what matters is Those banks more is the administrative status of the central bank after late July.

He continued: Pursuing the ruler in preliminary stages does not allow correspondent banks to sever their relations with the Central Bank because the central bank’s finances are not the ruler’s finances. Condemning the ruler on a personal issue and his management of the central bank and his wealth is not considered a condemnation of the central bank with its own money.

Let Wasim Mansouri receive it in the event of a vacancy in the governorship
Hammoud considered that it is not permissible to appoint a new ruler in the absence of a president of the republic, ruling out this occurrence, and it is likely that the first deputy ruler, Wasim Mansouri, will assume the duties of governance, from which there is no way to evade them, whatever the justifications, except by resigning, “which is something that I think Mansouri will not bear his responsibility.” In the event that Mansouri wants to resign, there is no objection to the caretaker government appointing a new ruler, because the vacuum in the seat of governance in light of the crisis the country is going through is a catastrophic matter that threatens the continuity of the banking system. Hammoud recalled the “Intra” crisis in the year 1966, as a result of which legislation and laws followed to address the repercussions of the crisis, “while today we are still going through the cycle of accusing the governor of the Banque du Liban or his innocence, his trial in France or in Lebanon … knowing that we did not find After a solution to the vacuum crisis in the governorship, after about two months.