Banque du Liban fails to produce documents for audit, stalling economic recovery

MENA

Published: 2020-11-03 13:24

Last Updated: 2024-04-17 08:42


Banque du Liban fails to produce documents for audit, stalling economic recovery
Banque du Liban fails to produce documents for audit, stalling economic recovery

Lebanon’s Caretaker Prime Minister Hassan Diab urged Tuesday the Banque du Liban to hand over all documents requested by the International Criminal Audit Firm.

The forensic audit of the Bank of Lebanon's accounts is the most prominent item in the economic recovery plan that the government approved months ago to negotiate with the International Monetary Fund. It was included in the provisions of the roadmap drawn up by France to help Lebanon get out of the cycle of economic collapse.

The Banque du Liban provided the company only 42 percent of the required documents, and refrained from sending the remaining documents, as it "contradicts" the Monetary and Credit Law that regulates the work of the Central Bank and banking secrecy, a source in the bank told AFP.

The company asked the Banque du Liban to provide it with the remaining documents by the third of this month, according to an official in the Ministry of Finance.

"What is required today is for the Banque du Liban to deliver the documents and information it requires to the criminal audit firm, so that this audit can begin to uncover the financial facts and the causes of this collapse," Diab said in a statement Tuesday.

He emphasized that the implementation of the contract does not violate the Monetary and Credit Law as well as banking secrecy, noting that "state accounts are not subject to banking secrecy." And he considered that "any attempt to obstruct criminal scrutiny is a partnership in responsibility for causing the suffering of the Lebanese people on the financial, economic and living levels."

It is not clear what will happen to the contract with the company in the event that the bank does not deliver all the documents.

In early September, the caretaker finance minister, Ghazi Wazni, signed contracts related to forensic auditing with Alvarez and Marsal, and for financial and account auditing with KPMG and Oliver Wyman. On the ninth of the same month, he announced the start of the first phase of forensic auditing of the accounts of the Banque du Liban.

Since assuming the presidency of the government at the beginning of this year, Diab held the governor of the Banque du Liban, Riad Salameh, responsible for the deterioration of the exchange rate of the Lebanese pound against the dollar, in parallel with sharp criticism from several political parties of the monetary policies that he adopted over the past years, as they accumulated debts. However, Salameh has repeatedly defended himself by asserting that the Central Bank "funded the state but did not disburse the money."

Since last year, Lebanon has been witnessing an economic collapse that coincided with an unprecedented decline in the value of the lira. In March, the state defaulted on paying its foreign debts, and then began negotiations with the International Monetary Fund, which were later suspended, pending the unification of the Lebanese negotiators, especially the representatives of the government and the Bank of Lebanon, their estimates of the size of the losses, and how reforms are being implemented.