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The press release that was made public on Thursday afternoon and was jointly signed by the four vice governors of Lebanon’s central bank (BDL) shook up the political and economic landscape, which was sinking into a destructive lethargy. The statement says a lot about the magnitude of the next deadline in the financial sector, namely the appointment of a new central bank governor. It sets the tone for the launch of discussions around the deadline on July 31, when Governor Riad Salameh’s term expires.
The four Vice Governors of the Central Bank, Wissam Mansouri, Bachir Yakzane, Salim Chahine, and Alex Mouradian, have broken their silence for the first time since their appointment in June 2020 by issuing a joint statement that denounces the entire ruling class.
The vice governors were explicit and blatant in denouncing the reprehensible behavior of the ruling class, outright rejecting the application of the caretaker principle to the state’s highest monetary authority, especially as the political forces are at odds over a plan to end the crisis.
The communiqué appears to carry a clear warning of resignation by the vice governors. Although the word resignation was not literally spelled out, it was implied when they referred to “measures they intend to take to preserve the public interest.” A while later, the inclination for a collective walkout was confirmed by the Third Deputy Governor, Salim Chahine, to Reuters.
The signatories wrote in their explanatory statement: “In view of political divergences, the unlikelihood of electing a President of the Republic and filling vacancies in the State’s administrations and institutions, and their impact on the work of the legislative and executive authorities, and given the disagreement between the political forces in their approaches to resolving the economic and financial crisis, and given that central banks formulate their monetary policies in accordance with the general policy of the State, which is unfortunately incoherent in the current situation of the Lebanese State, and in the absence of a comprehensive and clear plan to restore financial and banking equilibrium, as well as to achieve a balanced State budget, which would enable the central bank to lay the monetary and financial foundations for restoring confidence; it is unacceptable that the caretaker principle and expediting current affairs extend to the State’s highest monetary authority.”
“As the central bank governor’s term is due to expire on July 31, 2023, we consider it our duty to insist on the need to appoint a governor in accordance with Article 18 of the Monetary and Credit Law as soon as possible. Failing to do so will oblige us to take the measures we deem appropriate to preserve the public interest.”
Resignation and insubordination
Contacted by This is Beirut, one of the vice governors who requested anonymity confided that “by being independent, vice governors are required to make difficult choices.” A banking source, who welcomed the stance taken by the vice governors, said the communiqué amounts to “the expression of a clear desire by the vice governors to not submit to the wishes of political leaders, who for some time have been leaking to the press “incredible scenarios” concerning the management of the Central Bank at the end of Salameh’s term.” These scenarios envision either the current governor of the BDL being appointed as a consultant or the Central Bank being managed by a collegiate body.
That said, the joint statement signed by the four vice governors, including First Vice Governor Wissam Mansouri, who is supposed to take over as BDL’s interim head after July 31, is proof, if proof was needed, of their unified position and solidarity. They deny claims of discord between them made by certain political circles and show that none of them is prepared to take responsibility for a vacuum that risks being prolonged due to political conflicts.
In this context, a political source, referring to remarks made by the head of the legislature, Nabih Berri, on the need to not leave key posts vacant, such as that of the commander-in-chief of the army or the governor of the central bank, and the possibility of resorting to appointments “dictated by the principle of necessity in constitutional law”, suggests that a process is underway to extend the mandate of the current governor. An unlikely scenario, given the series of statements made by Riad Salameh in which he ruled out any possibility of “remaining in office” after the end of his term, but one that should not be ruled out.
Whatever happens in the coming weeks, the deputy governors will have had the merit of making their voices heard and the courage to condemn a criminal political class.
