The Central Bank of Lebanon revealed the establishment of a committee to restructure the financially affected commercial banks in the country and study their performance.
The mission of the committee revolves around restructuring banks, "studying the financial performance of Lebanese banks and proposing the necessary steps to preserve the integrity of the banking sector."
Lebanese banks are preparing for major changes after the country plunged into a financial crisis last October. The financial meltdown has led to a tightening of the dollar, and inflation, unemployment and poverty have jumped, pushing prices higher and fueling turmoil. Banks have come under criticism for freezing people's savings after using their deposits to finance the heavily indebted country.
The government is trying to get support from the International Monetary Fund to get out of the crisis, which is the biggest threat to Lebanon's stability since the civil war between 1975 and 1990.
These talks were stalled due to a dispute between the government and the central bank over the size of the losses in the financial system and how to distribute them.
In Lebanon, there are about 40 banks providing services to about six million people, as the sector swelled to four times the size of the economy. The combined capital of Lebanese banks is 31 trillion pounds, or the equivalent of 20.6 billion dollars at the official exchange rate, 1507.5 pounds against the dollar, or 8.9 billion dollars at a lower exchange rate of 3500 pounds used in government plans.
Source (Al-Sharq Al-Awsat newspaper, edited)
