Lebanon bank holdups: Identification of the real criminals?
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Alaina
- . November 19, 2022
- . Update: November 19, 2022 11:43 pm
Lebanon’s state finances currently have a huge $72 billion shortfall in them. By any standard of the law, mathematics, or logic, that number alone should indicate that Lebanon’s banks are insolvent. But ever since the start of the financial crisis, Lebanon’s banks and their ostensible watchdog, the Banque du Liban (BDL), have been putting up a strange ontological justification to avoid returning depositors’ money and formally declaring bankruptcy.
More than 60 of Lebanon’s commercial banks have adopted the concept that a US dollar is not actually a US dollar if it was put into a Lebanese bank prior to the financial crisis, despite the fact that there are no official capital controls in place. In contrast, they assert, a pre-crisis dollar is equivalent to a Lebanese pound and can only be withdrawn at a drastically discounted cost – about 90% less than the current value of an American dollar on the black market.
However, any US dollars put in these same banks following the financial crisis are “fresh” dollars and can be withdrawn or converted into another currency at any moment at their true worth. In essence, Lebanon’s banks are arguing that not all obligations to depositors are created equal.
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Naturally, this is not acceptable to the majority of Lebanese. A few desperate depositors have intervened after suffering under this ridiculous policy for three long years.
In Lebanon, bank robberies happen almost weekly, but there’s a catch: Not to steal other people’s money, but to gain access to their own wealth, people have been threatening to use violence in banks. No matter how justified the depositors’ rage may be, some people think threatening violence goes too far. It becomes difficult to equate these crimes to “regular” bank robberies when you consider how these people have lost their homes or are unable to provide for their family’ most basic necessities, such as food, education, and healthcare, all because a bank is denying them access to their own money.
