Lebanon’s central bank governor steps down without successor

Lebanon’s Central Bank Governor Riad Salameh, who is one of those blamed for the country’s financial crisis and wanted in Europe for alleged financial crimes, stepped down as planned after 30 years.

The government has yet to appoint his successor due to significant disagreements among the political class.

First Vice-Governor Wassim Mansouri will take over as interim head of the bank., while the country still reels from the 2019 financial collapse which plunged the local currency’s value and swept away citizens’ savings.

What is Mansouri’s plan?

“We are at a crossroads,” Mansouri said at a news conference. “We don’t have time, and we paid a heavy price that we cannot pay anymore.”

The interim governor proposed a six-month reform plan which involves introducing capital controls, a bank restructuring law and the 2023 state budget.

Mansouri’s plans resemble conditions set by the IMF last year for Lebanon to secure a bailout plan.

Lebanon’s financial downfall crashed the small Mediterranean country’s economy and ignited nationwide protests in 2019, which subsided with the pandemic, leaving behind a deepening economic crisis.

For years, the country has run on a cash-based economy, amid the blockage of citizens’ deposits within the banks, with the state barely surviving on tourism revenues and remittances from its millions in the diaspora.

Who is Riad Salameh?

Salameh took up the post in 1993, only three years after the end of the Lebanese civil war. His fiscal policies were hailed at first for reviving the country, which was then at the receiving end of reconstruction loans.

The later years of his tenure, however, were clouded with accusations of setting up a house of cards amid deep state corruption and mismanagement, which crumbled when the country’s dollar supply dried up.

Salameh is being investigated in France, Germany and Luxembourg over illicit enrichment and money laundering of some $330 million (roughly €300). The former governor shrugged off the accusations, insisting his wealth was amassed from his previous jobs and inheritance.