Lebanon central bank’s Salamé prepares for the next storm
After another tumultuous year for banking in Lebanon, the central bank governor discusses the political pushback against his actions, the potential impact of a new US law targeting Hezbollah and the prospects for his reappointment.
|Riad Salamé, the long-serving governor of the Banque du Liban
Every time Lebanese bankers jump a hurdle, another one rises before them.
Twelve months ago, on a quiet evening during Ramadan, a bomb exploded outside the headquarters of Blom Bank in Beirut. Responsibility for the attack was never claimed, but it was widely interpreted as a warning sent by Hezbollah to the Lebanese banking community, which was in the process of implementing a US law – the Hezbollah International Financing Prevention Act, or HIFPA – curbing the Shi’ite party’s access to the financial sector. Fortunately there were no fatalities. Eventually tensions surrounding the new regulation faded.
A year later, Blom has not yet finished replacing the glass shattered in the explosion, while another US law – even harsher toward Hezbollah than HIFPA – is already being prepared.
Riad Salamé, the long-serving governor of the Banque du Liban, is well aware of the pressures that could arise from any new legislation. He had, as best he could, appeased tensions between Hezbollah and the country’s banks last year by setting clear guidelines for the implementation of the US sanctions, thereby preventing Lebanese banks from over-zealously applying the rules.