The dispute continues between the government and banks … These are our numbers and our outlook for the future

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Claire Shukr wrote in “The Call of the Nation” MP Yasin Jaber reduced the core of the crisis by saying: “The government did not coordinate with the Bank of Lebanon and the Association of Banks when it laid down its plan … and the parliamentary blocs are the problem and the solution.” Before that, the head of the Finance and Budget Committee, Deputy Ibrahim Kanaan, had announced the approval of establishing a committee in which the parliamentary blocs, the Bank of Lebanon, the Association of Banks and the Ministry of Finance would be represented to arrive at the truth about the numbers about financial losses and a fair distribution of burdens after confirming that there are large discrepancies in estimating losses and numbers between the government, banks and economic bodies.

So, everyone in the bodies concerned sings a night out. The numbers, as Lebanese usually do, are point of view. As for the road map that the government has put in place for financial and economic reforms and which works to persuade the International Monetary Fund of its feasibility as a platform for radical reform, you will not find anyone who adopts it locally … nor who will vote on it in the parliament when it will be presented in the form of legal proposals.It is sufficient that the “strong Lebanon bloc” consider that the reform plan prepared by the government “will not be viable unless decisive decisions are taken according to which the weaknesses that we referred to in the Baabda meeting are corrected, and the most important of them is that the restructuring of the banking sector is required and not liquidated”, in order for the government to ensure That the required majority in the House of Representatives has become the ruling on the missing, especially since the positions of the opposition blocs are known in advance that it will put the plan on the morgue and will not remove it from Parliament except a dead body!

This means that the government has become a process, not a choice, to negotiate again with the parliamentary blocs, although some of them participated through representatives in the discussions of the Grand Serail to develop the paper.Prior to the arrival of these proposals to Parliament, here is the Association of Banks preparing to confront the government’s plan, with a supplementary paper, which should be a common dialogue base between the official financial authorities and those in the banking sector, in an attempt to reach common perceptions that reduce the gap between the two approaches, and develop and improve the government document Follow up banking sources say. Here it is rumored that the Finance and Budget Committee plays a serious role in coordination between official and banking authorities to reach common ground.

According to the bankers, the government laid down its plan without serious consultation with the Bank of Lebanon or the Association of Banks or Economic Organizations, not even with prominent parliamentary blocs. All the meetings that took place in this regard seemed superficial and closer to collars and face-saving. But it was never prepared to take stakeholders’ views. The Bank of Lebanon is the first concerned, since it holds the largest part of the internal debt in isolation from the position of the central governor, Riad Salama, followed by the banking sector, as it is not possible to restructure the debt without understanding with the creditors, and then the parliamentary blocs that will decide at the end of the road the fate of the plan as long as It will turn into laws, and if the parliamentary majority does not agree to these proposals, you will not see the light of day. Then there are the economic bodies that drive the economy and its nerve.

They point out that the discrepancy between the government and the banking sector revolves around two prominent issues: the first of which is the estimated loss numbers in the government plan that never coincide with that of the Banque du Liban and the association of banks. The second of them is the road map that is expressed by the government paper and which does not receive support by the Association of Banks, and therefore it worked on developing new ideas for it that could introduce amendments to the basic paper in a way that satisfies the aspirations of banks.

For banks, the government paper is “accounting” and not remedial, as if it is a company that settles its accounts and does not look to the future, while it is required to address the losses in a way that preserves the future and does not eliminate the economy in a destructive manner, by setting a real-time treatment pattern for the problem, and another future that protects the economy and with it the sector The banker.

Bankers note that the government paper exaggerates its optimism in terms of securing liquidity, whether through the support of the International Monetary Fund or Cedar or even looted funds, wondering how it can build its economic and financial aspirations on the basis of estimates that may remain numbers on paper? That is why the Association of Banks put a paper based on completely different foundations and aimed at rescue and treatment, but at the same time to preserve the depositors, and the durability and growth of the banking sector, otherwise its collapse is imperative.

With regard to the internal debt held by the Banque du Liban, the Association of Banks proposes the creation of a fund in which the state places some of its assets worth 40 billion, on the basis of which the Bank of Lebanon issues bonds backed by these assets with unpaid interest rates in return for canceling all the debt owed to Lebanon, provided that the remaining part of the profits goes Investing these assets for the state. We will be in the process of preserving the ownership of assets between the Bank of Lebanon and the state, and closing the dollar gap.

As for the external debt, they point to the need to negotiate in a transparent and good faith way to reach an understanding through which the external debt can be restructured by reducing interest and charging creditors with logical losses that do not affect the depositors and not the shareholders.

Two single points form the meeting line between the government and banks, which are the necessary structural reforms and the economic outlook expressed by the “McKinsey” plan and the Cedar infrastructure projects.





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