Lebanon's banks to resume strike as of Tuesday
The Association of Banks in Lebanon announced Thursday that the country’s banks will resume their open-ended strike on Tuesday, March 14, decrying recent judicial rulings.
In a statement, the Association called for “taking swift legal measures to put an end to this flaw in adopting contradictory standards in the issuance of some rulings,” warning that these rulings are “exhausting what’s left of deposits belonging to all depositors and not only some of them.”
Moreover, ABL stressed the need to “rectify some arbitrary judicial rulings” against banks, lauding State Prosecutor Ghassan Oueidat’s recent move against Judge Ghada Aoun.
The banks had suspended their strike on February 24 at the request of caretaker Prime Minister Najib Mikati.
The strike began on Feb. 7 in protest of a recent court ruling that forced one of the country's largest banks to pay out two of its depositors their trapped savings in cash.
Lebanon's banks have been hard hit by the country's historic economic meltdown that began in October 2019 and have since imposed informal capital controls under which depositors have been able to withdraw only small amounts of their savings at an exchange rate far lower than the one used on the market.
The economic crisis -- rooted in decades of corruption and mismanagement by the country's political class -- has left more than three quarters of Lebanon's population of 6 million in poverty. The Lebanese pound has lost 97% of its value against the dollar.
The informal capital controls have prompted some overseas depositors, locked out of their savings, to launch lawsuits overseas and in Lebanon to pressure banks to release their savings in full. In Lebanon, some depositors opted to break into banks, armed, and forced cashiers to hand over their money. Several such armed actions last year prompted the banks to go on strike in September 2022 and close down amid security fears for a week.
Earlier in February, Lebanon's Court of Cassation overturned a 2022 verdict in favor of Fransabank, sued by two depositors demanding their money in cash. The ruling threw out the previous verdict, which allowed the bank to pay them with a check. That would not have allowed them to retrieve their money in full since they would have had to deposit the check in a bank account, where the money would get stuck all over again.
In mid-February, angry Lebanese smashed windows and set tires on fire outside two of the country's biggest banks in the capital, Beirut, as the value of the Lebanese pound hit a new low.
Despite the economic meltdown, Lebanese authorities have not implemented reforms demanded by the international community in order to release billions of dollars in loans and grants. The International Monetary Fund has criticized Lebanon for its sluggish progress on the reforms since talks between the government and the IMF began in May 2020.
At the same time, banks have refused attempts to make their shareholders assume responsibility for the crisis -- as envisaged under a proposed economic recovery plan- - and have insisted that the government and their own depositors share the biggest burden for the losses.
Source: Naharnet
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