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3. Souhaid Unveils Roadmap as Central Bank Governor

In his inaugural speech, Karim Souhaid, the newly appointed Governor of Lebanon’s Central Bank (BDL), outlined his strategic vision for the next six years. He also addressed the criticism directed at him prior to his appointment, providing clear and direct responses to concerns regarding the institution’s key challenges.

The new governor highlighted several priorities: strengthening BDL’s governance, ensuring the return of deposits, restructuring the banking sector, and remaining open to all proposals aimed at resolving the banking system crisis.

“Deposits are guaranteed, and their repayment must be managed through shared responsibility between the banks, BDL and the state,” he stated, emphasizing that priority will be given to repaying small depositors. He further highlighted the necessity of recapitalizing commercial banks and ensuring they fulfill their role in repaying deposits. “Simultaneously, BDL must undertake a comprehensive restructuring of the banking sector,” he added.

Souhaid stressed that restoring trust in the financial sector is a central objective. This, he explained, would involve creating effective incentives and revitalizing the economy through a legally sound and efficient financial and banking sector. Additionally, he warned that all banks would be required to gradually increase their capital by injecting new funds. Banks that are unable or unwilling to comply will need to consider merging with other institutions.

Additionally, he emphasized that BDL would actively combat the informal economy by strengthening efforts against money laundering and the financing of terrorism. He also announced a change in the institution’s communication strategy: from now on, BDL will adopt a more reserved approach, discontinuing interviews in favor of official communications via written statements and economic reports.

Souhaid concluded his speech by reaffirming his commitment to upholding the Constitution, existing laws and the regulations governing BDL. This commitment aligns with the oath he took earlier on Thursday before President General Joseph Aoun.

Former Interim Governor Wassim Mansouri congratulated Souhaid and commended BDL’s achievements during the transitional period under his leadership. He expressed confidence in the new governor, stating, “BDL is in good hands.”

However, Mansouri stressed that “it is unacceptable for the Central Bank’s governor to be unable to provide a clear answer regarding the fate of depositors’ funds.” He clarified that this issue “is not solely the responsibility of the governor but should be part of a broader government plan that must be approved by Parliament.”

Mansouri also emphasized that the Central Bank never ceased operations despite the ongoing crisis. “We have cleaned up BDL’s entire balance sheet by reversing the effects of previous financial engineering operations,” he concluded.