Lebanon parliament extends lifting of bank secrecy to audit central bank

Lebanon’s parliament on Monday extended a law that lifts banking secrecy regulations to facilitate a forensic audit of the country’s central bank, a key condition for foreign aid that has hit a roadblock, MPs said after the session.

Such an audit is on a list of reforms that donors have demanded before helping Lebanon climb out of a financial crisis that has locked most savers out of dollar-denominated bank accounts and left four in five Lebanese poor, according to UN agencies.

These reforms include steps to tackle corruption, a root cause of the meltdown that has crashed the currency and triggered a sovereign default.

The Lebanese parliament adopted a law in December 2020 that lifts banking secrecy in regard to the central bank audit for one year. The law expired at the end of last year.

MP Ibrahim Kanaan, head of parliament’s finance committee, said the law had now been extended until the completion of the audit.

“This law puts the forensic audit on the final track,” Kanaan said in televised remarks.

Restructuring consultancy Alvarez & Marsal (A&M), which the Lebanese government has hired to carry out the audit, initially withdrew in November 2020 saying it had not received the information it required. A second contract was signed in September 2021, but the audit has not yet commenced amid requests by A&M for more information from the central bank.

A central bank spokesperson told Reuters earlier this month that the central bank had provided “all info” and urged A&M to commence.