The general strike decided by the Association of Banks of Lebanon, representing bank executives, began on Monday 8 August, with the closure of all financial institutions, causing the paralysis of most of the economic sectors. This general strike is expected to last at least until Wednesday, when a new ABL meeting should take place to decide on the follow-up to their movement.
This strike comes after the arrest, last Monday, of the president of the Credit Bank, Tarek Khalifé, at Beirut International Airport against the backdrop of a criminal complaint filed against him by a shareholder who accuses him of non-payment of dividends despite the facility generates profits at the official parity rate of 1507 LL / USD. Other local complaints, this time filed by depositors, target various institutions including Fransabank, Byblos Bank, Banque Audi, SGBL – also accused of violating informal capital control and participating in a manipulation of the pound price Lebanese versus the dollar -.
Lebanese banks are not the first such action. Already in 2020, after the financial prosecutor had found numerous irregularities and indicted the managers of 20 Lebanese banks as well as the members of their boards, the latter had then responded by announcing the closure of their establishments before the prosecutor, Judge Ghassan Oweidat , pressured Judge Ali Ibrahim to close his eyes.
This time in the face of the forthcoming restructuring of the financial sector, which involved a general overhaul of the top 14 Lebanese banks, but also various legal proceedings by depositors whose funds have been frozen since November 2019, complaints that have ended until now with a victory in the courts but the refusal of banking institutions to execute these decisions, and the demands of the IMF that local exchange rates can be unified leading also to the failure of all retail establishments, Lebanese banks, 43% of the whose shares are held by politically exposed people, have decided to block part of the economy with significant consequences. In fact, transactions relating to the purchase of raw materials such as medicines, food or even the supply of foreign currencies through the electronic platform Sayrafa of the Banque du Liban of which they are intermediaries are frozen by this strike action. This move is already having an impact on the Lebanese pound parity rate on the black market, which has risen above LL / USD 31,000 as of this Sunday.
The Banque du Liban, the supervisory authority, is not spared from lawsuits with ongoing investigations against its governor Riad Salamé and his relatives, not only locally but also abroad. They are therefore accused of embezzlement and money laundering. Faced with the descent of the prosecutor of Mount Lebanon, judge Ghada Aoun, two weeks ago the employees of the BdL had also threatened to strike.
Faced with these movements, the various unions responded this weekend, in particular the CGTL, those of the liberal professions or even the groups of parents of Lebanese students abroad, denouncing what they consider a hostage taking by the banks from the 2019 following the introduction of informal capital controls and requesting the continuation of the ongoing investigations against financial institutions and their managers.
The circle of judges also heard this Sunday that the ABL was trying, through this maneuver, to take the population hostage in order to blackmail them in the face of legal proceedings.
“After the political, sectarian and medical reservations, the banking protectorate became a protectorate, responding with a strike to a judicial decision, threatening to stop all financial and banking operations for an entire people “, consider the magistrates, noting that it is underway a campaign against them.
“This systematic intention to strike justice to widen the gap between it and public opinion to prevent any responsibility. When will it stop?“, The representatives of the judges asking for La Défense de la Justice ask.
The report published in 2020 by the Foundation for Defense of Democracies and entitled Crisis in Lebanon, Anatomy of a financial Collapse considers all the Lebanese banks studied to be insolvent. They are also threatened with legal proceedings, accused of money laundering and the link of some institutions with Hezbollah in the United States.
• Audi SAL bank
• Bank of Beirut SAL
• Bank of Beirut and the Arab Countries SAL
• Bankmed SAL
• French Banque Lebanon-Sal
• BLOM Bank SAL
• Banca Byblos SAL
• Lebanese credit SAL
• Banca Fenicia SAL
• Fransabank SAL
• Banca IBL SAL
• Lebanon and Banca del Golfo SAL
• Bank MEAB SAL
• Société Générale de Banque au Liban SAL
Among the banks mentioned:
In total, the 14 banks considered would require a contribution of 67 billion dollars, far from the maximum sums that Lebanon could obtain in the context of international aid, or 26 billion dollars (15 billion dollars of loans through the IMF). and $ 11 billion through CEDRE on the condition that the economic, monetary and financial reforms necessary to unlock them are implemented).
According to the calculations of a foreign expert, all the factories would require massive injections of funds, ranging up to 11.9 billion dollars for the BLOM alone, followed by 11 billion dollars for the Audi Bank, sums now unobtainable in Lebanon itself. . The risk of bankruptcy or even total closure is therefore present for these establishments with significant losses for the current shareholders.
They may only survive if they blend or even cut the hair on the deposits.