EXCLUSIVE Lebanese banks object to proposals in draft govt financial plan

BEIRUT, Feb 7 (Reuters) – Lebanon’s banking association said on Monday it opposed proposals set out in a draft government plan reported by Reuters last week for tackling the financial crisis, saying they would cause a long loss of confidence in the financial sector.

Responding to written questions from Reuters, the Association of Banks in Lebanon (ABL) said that it had not seen an official version of the plan.

A senior Lebanese government source told Reuters the plan had not yet been finalised and was being discussed with the IMF.

The draft aims to plug a huge hole in the financial system and foresees returning just $25 billion out of a total $104 billion in hard currency deposits to savers in U.S. dollars. L1N2UD1JU

Lebanon’s banks have been a major lender to the government for decades, helping to finance a wasteful and corrupt state that went into financial meltdown in 2019.

The collapse has resulted in depositors largely being shut out of their savings and the local currency losing more than 90% of its value.

“This hypothetical draft plan indicates it can eliminate the so-called ‘losses’ in order to balance the books. This approach… is a liquidation approach and will lead to a persistent loss of confidence for generations to come,” the ABL said in its written responses.

“Other than what has been published and reported in the media, we haven’t seen any official draft of any plan prepared by the government,” it…