Lebanon’s financial crisis intensifies as banks begin two-day strike

BEIRUT: Lebanese banks on Monday declared a two-day strike to protest against court rulings against Fransabank, Credit Bank, Banque du Liban et d’Outre Mer, Bank of Beirut, Societe Generale, Bankmed and Aoudi Bank.

The banks condemned the rulings as arbitrary, noting that some lawsuits filed by depositors relate to their claims to recover US dollar funds that have been held by the banks for more than two years.

The strike puts the banks on a collision course with the justice system. Banks and the political elite are now awaiting the outcome of meetings between Justice Minister Henry Khoury and the heads of the judiciary, ordered by Prime Minister Najib Mikati on the basis of the principle of separation of powers.

The situation escalated on Monday after Judge Ghada Aoun, the appeal prosecutor general of Mount Lebanon, ordered the provisional seizure of real estate belonging to Rajah Salameh – the brother of Riad Salameh, the governor of Banque du Liban. – who was detained on Friday in connection with activities involving the public treasury “which was found to have been wasted according to preliminary investigations”.

Judge Aoun said she had now referred Rajah Salameh to prosecutors after previously referring him to Mount Lebanon’s first investigating judge, Nicolas Mansour.

Riad Salameh, meanwhile, did not appear Monday at a hearing during which he was to appear before a judge. As a result, Judge Aoun filed charges against him, businesswoman Anna Kozakova, and a number of companies for “illicit enrichment and money laundering”, and dismissed the Mansour cases.

Responding to the allegations against him, Riad Salameh told Reuters: “I ordered an audit and it was proven that public money was not the source of my wealth.”

Judge Aoun’s preliminary investigations were conducted in response to a complaint filed by the activist group Rouwwad Al-Adalah, which translates to Pioneers of Justice.

The Bank Employees’ Union, which supported the banks in their strike, said it hoped that “justice will objectively deal with the crisis with the banks, because the latest court decisions have not only affected the banks concerned but have circumvented them to affect all banking sectors”. sector, noting that its results will be disastrous for the sector overseas.

The political-legal debate has generated arguments about the legality and illegality of procedures and the economic effects of targeting banks. There are fears that the banks will step up their action, which could include an indefinite strike to protest against the rulings of the judiciary in favor of depositors.

The Association of Banks of Lebanon called on “the political authorities to take the necessary measures to put an end to the violations of the law against the banks, and to put an end to the scandalous infractions of certain parties, in particular the judiciary, by violating the laws and by continuing arbitrary and barbaric practices that would result in judicial chaos.

The private banks accuse the political authorities and the BDL of being responsible for the deposit crisis, for having continued to take out loans and not repay them, noting that the banks have continued to lend money to the State while that they knew it would not be reimbursed due to corruption.

The Federation of Bank Employees’ Unions called for the public to be informed “of the reasons which led to the evaporation of bank deposits and the aggravation of the crisis between depositors and banks”, and said that “successive governments continued their borrowing policies and continued to spend money without any oversight until the country fell into crisis.

He also questioned the role of the “Superior Council of the Judiciary and the Judicial Inspection Authority in monitoring the work of judges, and the extent to which some judges adhere to the principles of judicial work, in particular regarding the banking sector.

On Monday, the U.S. dollar’s exchange rate against the Lebanese pound rose further in light of the bank strike, raising public fears of a further price hike. Public and private sector workers and pensioners have expressed their anger at not being able to withdraw their salaries and pensions from banks.

Sarkhat Al-Moudiin, which translates into the outrage of depositors, and other activist groups have threatened “in the coming days to expand their efforts to determine the criminal and financial responsibilities that led to the current financial crisis , to hold politicians accountable, and to ensure that everyone gets what they deserve.

Previous EDITORIAL - Quality of life
Next Lebanon urged to end crisis with Gulf Arab states