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Lebanon’s Banking Association Blames Politicians for Financial Meltdown

Lebanon’s Banking Association Blames Politicians for Financial Meltdown

Friday, 9 April, 2021 - 09:45
A demonstrator wears a mask during an anti-government protest in the southern city of Nabatiyeh, Lebanon October 22, 2019. REUTERS/Aziz Taher

The Association of Banks in Lebanon (ABL) issued a statement on Thursday, denouncing “a campaign of accusations” by the political class, after a recent speech by President Michel Aoun, in which he blamed the banking sector for the country’s financial collapse.

The statement noted that the political authority was trying to disregard the facts that have led to the current deterioration, citing the state’s excess borrowing from the funds deposited at Banque du Liban (BDL).

“It was not banks which used to stress the pegging of the national currency rate in every ministerial policy statement over the past 30 years,” the ABL statement read, adding that the banks did not encourage the state to increasingly borrow from the funds deposited at the central bank.

The ABL affirmed its commitment to return the depositors’ money, as soon as the state returns the funds borrowed from the Central Bank.

It also indirectly blamed the political authority of issuing decisions and laws of treasury advances.

“The banks were not the ones who set the frameworks for subsidies or spending on the energy sector, as in other sectors,” it added.

On the other hand, the statement stressed that thanks to the banks, the state was able to provide salaries for all categories of the public sector. The banking sector was settling the highest percentage of tax collection annually for the benefit of the public treasury, the ABL underlined.

The ABL criticized the “policies of the waste of funds and the irresponsible taxing and customs laws.”

“Banks were not behind the decisions of arbitrary employment in state institutions and they did not accumulate the deficit in the balance of payments,” its statement emphasized, adding that the political crisis and the vacuum that it created was the main reason behind Lebanon’s financial and banking meltdown.

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