Do depositors get their money back? – MTV Lebanon

Patricia Glad wrote in “Nidaa Al-Watan”:

In its latest report, the World Bank emphasized the need to move forward in a fairer distribution of financial losses to put the Lebanese economy on the road to recovery. And he believed that «with financial losses exceeding US$72 billion, the equivalent of more than three times the gross domestic product in 2021, the floating financial sector has become unsustainable due to the lack of sufficient public funding for it; State assets are worth only a small part of the estimated financial losses, and potential revenues from oil and gas are still uncertain and need to be realized for years.

In contrast to this scene, the estimated assets of the banks, which are estimated at about $5 billion, are also insufficient to return the funds to depositors, whose value is approximately $83 billion. From here, what appears to be the most efficient solution for the depositor to get his money back with the lowest possible “haircut” rate and loss?

Prime Minister Najib Mikati’s government launched an economic recovery plan, during which it pledged to return about $100,000 to depositors, either in liras, according to the dollar exchange rate on the black market, or in the greenback. This sparked debates and was rejected by associations that defend the rights of depositors, asking about accounts that exceed that number and the reason for not providing a guarantee for its payment.

Economist and university professor, Bassam Al-Bawab, believed during his interview with “Nidaa Al-Watan” that “the government’s plan will not save all the depositors’ money.

Given that the plan was rejected by depositors, banks, economists and the private or public sector, he indicated that it would destroy the Lebanese economy and bring it back to zero, far from starting a course of reforms and preparing a sovereign fund.

And the violation began, as the concierge explains, “from the state that did not pay the money owed to it by the Banque du Liban, and the latter to the banks, which in turn do not pay the deposits to the account holders. Solving this issue requires restoring confidence in the country, and finding a political solution that leads to the election of a president and the formation of a government, whereby the reforms and promises of the state to the International Monetary Fund will be put to the test. on the right path”, emphasizes the international community. However, until today, Al-Bawab sees “no intention on the part of officials to approve reform measures, but an intention to benefit from existing and even remaining funds at Banque du Liban, which do not exceed 9 billion dollars.”

the desired connection

Regarding the option of merger or restructuring of the banking sector in question, and the request to prepare a law for this by the international community, especially the World Bank and the Monetary Fund, Al-Bawab considered that it is well known that “some banks, even before the crisis, they did not accurately track assets and their number is large in relation to the size of the Lebanese market.” However, the Banque du Liban did not take decisive steps, considering that this measure does not have the nature of an emergency. .

Emphasizing that “it is necessary to buy banks that were in trouble before the crisis, and are still among the large banks that enjoy liquidity, then liquidity will be available on the market in a value greater than that which was present in the past”.

Banks also have to attract foreign capital again, and in this way they return and pump into the economy previously transferred funds. Banque du Liban asked banks to deposit 3% of their total foreign currency deposits with correspondent banks, so this percentage must increase over time, so that banks will resume their role and the lending wheel will return to the private sector.

Therefore, solving our financial and economic problem and returning depositors’ money, according to the gatekeeper, “requires a political decision that the system does not make because of the entrenched corruption, chaos and extravagance. Lebanon is not the only country that is going through economic, financial and monetary problems, but it has preceded by Greece, Cyprus, Argentina and Venezuela.”

Money back within 15 years

And he believes that “the money will not be returned to depositors in any plan within one, two or three years, but it is estimated that this period will be between 10 and 15 years, with a hidden “hierarchy” due to inflation. ” Emphasizing that “immediately after the return of confidence in the banking sector, the Lebanese Bank and the state, the depositor will recover his deposits in stages on the impact of the economic wheel turning again and from state imports, then the reprogramming will last 15 years.” Emphasizing that “the state is not bankrupt and cannot go bankrupt, and the situation in which it finds itself refers only to the description of false bankruptcy”.

As for the process of breaking into the bank, which has become a daily habit, or the lawsuits that are brought against it with the goal, it, economists unanimously agree, has even solved the problem of part of the depositors due to their need for seized funds, but it will not return the money of all depositor even in case of bankruptcy.

If the return of depositors’ money today is between two pillars apart from the restructuring plan, the best of them is the liquidation or bankruptcy of the banks and the insufficiency of assets and funds to pay the value of the deposits and the Deposit Insurance Company. paid the sum of 75 million pounds, which is no longer equal to 2000 US dollars from 50 thousand dollars at the exchange rate of 1515 pounds, or proceeding with a plan that guarantees bills of 100,000 dollars, or “reeling” the politicians, putting aside their own interests and embarking on a renaissance countries?