France says Lebanese depositors may not get all their cash, minutes show By Reuters

© Reuters. FILE PHOTO: Salim Sfeir, chairman of the Association of Banks in Lebanon and chief executive of Bank of Beirut

BEIRUT (Reuters) – A senior French official has said it might be difficult for Lebanon’s banks to stick to the principle that savers should not lose any of their deposits, according to the minutes of a meeting in which France outlined steps to help the crippled banking industry.

The comments were made during Sept. 10 talks in Paris between senior French officials and a delegation from the Association of Banks in Lebanon (ABL). Reuters reviewed a copy of the minutes, marked confidential.

France has taken the lead in international efforts to push Lebanon’s fractious politicians to implement reforms needed to attract aid and ease a crisis that has paralysed the banking sector, shutting depositors out of most of their funds.

“While it is a matter of principle for the ABL that depositors should bear no losses, it may be difficult to defend this to the end. But this is a matter of negotiation,” Pierre Duquesne, President Emmanuel Macron’s envoy to coordinate international support for Lebanon, said, according to the minutes.

Lebanon’s central bank and commercial bankers have sought to prevent a “haircut”, or formal reduction in balances held on deposit accounts.

But savers with U.S. dollar accounts in Lebanon say they have already lost money as they cannot access funds or can only do so by exchanging into Lebanese pounds below market rates.

The Lebanese pound, which was pegged to the dollar for more than two decades, has crashed during the financial crisis.

The French Foreign Ministry had no immediate comment.

“We felt throughout our meetings with senior French officials dealing with the president’s initiative, that they support a prosperous banking sector,” a senior Lebanese banker who participated in the talks told Reuters.

A French diplomatic source said the talks were part of efforts to implement the economic road map for Lebanon.

In addition to comments on deposits, Duquesne listed other measures needed, including the swift implementation of capital controls and bank consolidation in a country with 64 banks controlled by 32 groups.

On restructuring Lebanon’s mountain of foreign and internal debt, Duquesne said a range of actions was needed. “There is no miracle solution,” he said.

The Lebanese banking group’s representatives, including the association’s head Salim Sfeir, said banks were ready to join “collective efforts” to resolve the crisis and outlined proposals that included their backing for a fund to mobilise state assets, the minutes showed.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *