Lebanon's deputy central bank chiefs urge government to appoint new governor

Deputy governors say they will take action if a chief is not named soon as Riad Salameh departs on July 31

Riad Salameh has been at the helm of Lebanon's central bank since 1993. AP
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Lebanon's central bank deputy governors called on authorities to urgently appoint a new chief to take over the reins from Riad Salameh when his term expires on July 31.

In an unusual statement from Banque du Liban, which was sent to The National on Thursday, the four deputy governors said they would be forced to take action if a successor was not named soon.

“We see it as our duty to emphasise the necessity of appointing a governor … at the soonest possible time, otherwise we will be forced to take the action we see as appropriate for the public interest,” Wassim Manssouri, Bachir Yakzan, Salim Chahine and Alexandre Mouradian said, without specifying what action would be taken.

According to protocol, Lebanon's central bank governor is appointed to a six-year term by the cabinet, on the recommendations of the finance minister.

After consultations with the governor and having considered the finance minister's proposals, the deputy governors are appointed by the cabinet to renewable five-year terms.

Based on the country's complex power sharing and sectarian system, the governor is usually a Maronite Christian while the four deputies are Sunni, Shiite, Druze and Armenian-Catholic.

Should the governor position remain vacant after the mandate of Mr Salameh expires, Lebanon's laws stipulate that the first vice-governor, Wassim Manssouri, takes over.

Mr Salameh is under investigation in six European countries, which suspect him of having embezzled more than $330 million from Lebanon's central bank with the help of his brother Raja and using the proceeds to purchase luxurious properties in Europe.

He is also the subject of judicial inquiries at home but has denied any wrongdoing and consistently said the source of his personal wealth, before assuming his position as governor, was derived from his time as a banker and family inheritance.

Mr Salameh, who was first appointed governor by the late Prime Minister Rafic Hariri in 1993, previously worked at Merrill Lynch in Paris and Beirut and was a private banker to Mr Hariri.

He has said he intends to step down when his current term expires. The Lebanese government has not indicated whether it is considering removing him before then.

Authorities have yet to name a successor for the role as the country remains in the grip of a severe financial crisis.

The World Bank has described Lebanon's dragging economic crisis as one of the worst in modern history.

As of mid-June, the central bank had $14.4 billion in foreign assets, $17.8 billion in gold reserves and gross foreign currency reserves of $9.83 billion.

Lebanon has yet to enforce critical structural and financial reforms required to unlock $3 billion of assistance from the International Monetary Fund, as well as billions in aid from other international donors, due to a lack of consensus among the political ruling class.

The country has a caretaker cabinet led by Prime Minister Najib Mikati, but with limited powers.

It also needs to elect a president after the six-year term of Michel Aoun ended at the end of October, but this requires the agreement of the political elite.

Updated: July 07, 2023, 8:24 AM