BEIRUT, Lebanon- Lebanon’s new central bank governor pledged Friday to fight money laundering, terrorism and drug smuggling and emphasized the need to restructure the banking sector and return depositors’ money.
“The Central Bank will work on combating all kinds of money laundering, financing terrorism, drug smuggling, smuggling across the borders, currency counterfeiting, and the illegal circulation of money in the economy,” Karim Souaid said after he officially took office.
Lebanon has been requested, particularly by the United States, to fight financing terrorism and money laundering in exchange for helping it get out of its acute financial and economic crisis.
Washington’s main concern is to prevent Hezbollah, the Iran-backed militia , from using the country’s banking system and cash economy to rebuild itself.
Souaid was appointed last week by the government to replace Riad Salameh, the former Central bank governor who stepped down last year after remaining in his post for three decades.
Salameh was arrested last September, becoming the first high-ranking official to be put behind bars on corruption and embezzlement charges since the 2019 financial crisis that led to the collapse of the country.
Souaid’s appointment came as Lebanon was still trying to reverse its economic crisis, described by the World Bank as one of the worst in the world since the mid-19th century.
Tackling one of the crisis’s most shaky issues, the new central bank governor said depositors’ bank savings were protected by the Lebanese law and the Constitution.
“Therefore, we should work on returning all deposits gradually,” Souaid said during the official handover ceremony with Wissam Mansouri, who served as acting central bank governor since July 2023.
Souaid said the Lebanese banks, Central Bank and the Lebanese state should shoulder their responsibilities in returning deposits, adding that the “priority” must be to first pay the small depositors whom he described as “the weakest circle.”
Depositors have been struggling to secure their rights after the banks deprived them of their life savings since the crisis began in 2019 by imposing their own rules in the absence of any government measure to regulate the financial sector.
The crisis, which the World Bank described as Lebanon’s “deliberate depression” orchestrated by the country’s corrupt ruling elite that had exploited state resources for decades, led to financial losses estimated at some $72 billion.
(UPI)