Banking crisis in Lebanon Ep.5 (final): Who is paying?
Synthesis of the previous 4 episodes: already negative reserves as early as 2015, more than $24 billion transferred from banks to the central bank (including a portion of which went into dividends abroad), $6.1 billion returned since 2023 but at 68% paid by the central bank itself, and a real liquidity of the banks reduced to a residual of $1.59 billion. So who really pays the bill? Depositors, by capped withdrawals. Companies, which finance their cash imports. Consumers, through prices that absorb the invisible cost of missing credit. And eventually, the taxpayer. Meanwhile, inflation exceeded 17.5% and the economy contracted by more than 6%: the very definition of stagflation. Eight years after 2019, Lebanon is still experiencing the same crisis.
Sources: Central Bank of Lebanon balance sheets, Alvarez & Marsal audit, International Monetary Fund, Central Statistics Administration.
