The uprising up to the Association of Banks!

Are we facing a banking division over the way to deal with the crisis, or is what is happening between the banks a reflection of the political disagreement over the recovery plan and the government’s programs supposed by its president, Najib Mikati, to work with the International Monetary Fund or the project to restructure the banking sector itself and the loss distribution program?

What is happening a few days ago is an unprecedented step in the history of the banks’ relationship with the board of directors of the Association of Banks in Lebanon, as voices objecting to the management of the Association’s president, Salim Sfeir, and his uniqueness in decisions concerning big plans came out to the public for the first time.
Today, the Board of Directors of the Association of Banks is holding a meeting to discuss the criticisms leveled at Sfeir against the backdrop of his uniqueness by sending a message to the International Monetary Fund saying that the agreement between Lebanon and the Fund at the staff level is illegal and unconstitutional. The content of the message contained a lot of what the banks did not want to disclose or adopt publicly, especially with regard to the proposal to sell gold to cover the losses incurred between the Banque du Liban and the banks.
The leakage of the letter to the media led to objections that prompted Bank Audi to disavow it, noting that it had not seen its content, and hinting that the letter contained an implicit acknowledgment that there was no solution except by Lebanon signing a program with the IMF to avoid further destruction, although it has reservations about what It was included in the plan with the fund.
However, the largest bank in Lebanon was not the only objector to the letter, as Al-Mawarid Bank took an escalating position in which it announced the suspension of its membership in the Association of Banks. There was also a position for BankMed in the same context, and bank officials said that they were not aware of this message, did not see it and did not agree to send it, calling for “activating the governance mechanism in the association’s board of directors and respecting the decision-making mechanism, in a manner that secures the interest of all concerned.” ». And the governance mechanism is a clear reference to the decision-making mechanism and the exclusivity that Sfeir practices with a very narrow circle of the association’s board of directors regarding decision-making related to the distribution of losses and the restructuring of the banking sector.
It may be premature to conclude that these positions, with the exception of the position of the Al-Mawarid Bank, especially from Bank Audi and Bank Med, will take a path towards further escalation. It is true that there are many banks that object to the decision-making mechanism in the association and the behavior of its president, but the matter did not reach the point of splitting from the association. This comes despite the fact that the interests of the banks are very conflicting in this period between banks that have the ability to continue, despite the large losses they have incurred, and others that are not viable. Also, the objections to Sfeir’s behavior and the association’s management are not new. Rather, there are many banks that believe that Sfeir speaks in the name of their interests, while he does not seek these interests as much as he is concerned with managing his own bank’s interests.
The association’s advisor, Carlos Ebadi, who is known to be Zionists, had prepared this letter, proposing a redistribution of losses in a way that would allow banks to evade their responsibilities towards depositors, and link the fiduciary responsibility on deposits, with their stupidity and greed in investing money with the Banque du Liban and profiting greatly from it, although on the Calculation of compromising its financial solvency.