The Association of Banks in Lebanon has put forward an alternative economic rescue plan than the one that was approved by the Lebanese government earlier.
The Lebanese banks, which suffer from a lack of liquidity, strongly criticize the government bailout plan, which is the basis of negotiations with the International Monetary Fund, partly because it calls for contributions from depositors and financial rescue from shareholders that will write off their capital.
In its plan, the association called for avoiding defaults on internal debt and creating a so-called debt-extinguishing fund, where $40 billion of public assets are being used to settle domestic debt as part of ways to reduce pressure on banks. Comments on the plan could have a major impact on the International Monetary Fund, given that banks are among the largest debt holders in Lebanon.
In this context, the president of the Association of Banks in Lebanon, Salim Sfeir, pointed out that "While we do not question the good intentions of the Prime Minister, we must warn that if the government's economic plan is implemented, it will lead Lebanon to a socio-economic disaster."
The Association of Banks complained that it had not been consulted about the government's plan, which includes strict measures to solve a crisis that saw the currency collapse, increased unemployment, and default on the payment of sovereign debt.
Source (Al-Khaleej Newspaper-UAE, Gulf, Edited)
