By the same logic, banks want to deal with defaulting on private sector loans. Putting a hand on real estate guarantees means increasing people’s misery. He who mortgages a house will find himself expelled from him. Someone’s car will be taken away because he defaulted on the bond. Many properties will be sold by banks at auction, because their owners have not repaid their loans. Factories and institutions whose owners will be forced to close and fire workers, because the bank has seized its properties. All that is mortgaged in order to obtain a loan, the banks will put their hand on him to try to compensate the losses in their portfolio, thus saving themselves from paying their capital to extinguish the losses. Banks and the Parliamentary Committee dealt with this issue from a purely mathematical background, without establishing any consideration for social standards, just as it did since after October 2019 and the Corona crisis, as it resorted to seizing the property of those who failed to pay interest on the loans, challenging Temporary exemption decisions.
The government has fixed non-performing loans at 40,000 billion liras
But even the economic and financial interest requires that banks not act in a “notebook” manner. So, while ways are being sought to increase growth and reduce losses, is there an interest for banks in increasing poverty and unemployment rates and “slicing” people everything they own?
Representatives of the “fact-finding” committee argue that their report includes “the numbers of the Banking Supervision Committee, at a time when the government was not coordinating with the party concerned, because it wanted to satisfy the International Monetary Fund.” And they explain that private sector loans are divided between 29 billion US dollars, and the equivalent of 15 billion dollars in Lebanese pounds, based on the exchange rate of 1515 pounds. “The primary risk, according to the Oversight Committee, is that loans in US dollars have defaulted. The number was more than that, but it declined because some people paid off the debt. The oversight committee settled the controversy. And these deputies admit that “the matter will have consequences for the people, but the accounts were financial, not social.”
In their speech, MPs confuse loans that were not counted as “unproductive”, and therefore “hope” is still high that their owners can repay them, and the loans that were included in the bank accounts as “bad”, and that it is settled that the bank will not recover them.
Putting a hand on real estate guarantees means increasing people’s misery and getting them out of their homes
On April 27, the Banking Supervision Commission predicted (See «News», Capital Supplement) That the value of “nonperforming” bank loans and loans at the end of 2020 double to $ 15.22 billion, or 30.5% of the total portfolio of $ 49.9 billion at the end of February 2020. Workers on the government financial plan confirm that the numbers they set are also obtained … from the Banking Supervision Committee, the day it was headed by Samir Hammoud (her term ended last March). And they add that, “We agreed that the final number of bad loans is only counted after checking the books of each of the banks.” The latter declined to hand over its numbers to the government, and “gave it to the representatives of the International Monetary Fund, who found that the number of losses included in the government plan is the most accurate.”
But is it permissible to use guarantees? Workers respond to the government plan that “cases must be dealt with in an independent manner, and clear standards established for dealing with safeguards.” But for the government plan, these are also losses, for many reasons. First, “Isn’t taking a borrower a car or a car, too, a loss? Their use is considered poverty for the people, while liberalism requires that the losses be borne by the owner of the capital. Secondly, one of the main crises in the country is related to a lack of liquidity in foreign currencies. “Will banks be able to sell real estate in dollars coming from abroad, or will they inflate their real estate portfolio as happened in the 1990s?” Third, according to “what the IMF transferred to the banks, the guarantees lost a lot of their value, and their liquidation is not enough to compensate the losses.”