Photo archive: Bank of Lebanon sign, 5 June 2011. It does not show gold reserves. Photo: Karan Jain / Wikimedia Commons, CC BY-SA 2.0. Typing and resizing; adaptation broadcast under the same licence: https://creativecommons.org/licenses/by-sa/2.0/ .
Lebanon must not sell its gold to allow bank owners to escape the crisis they have helped build. This refusal is neither a cult of the ingot nor an indifference to the fate of the depositors. It is based on an economic rule: collective wealth must not replace the absorption of losses by those whose capital was committed, whose decisions have exposed savings and whose management must be examined. Before asking what the gold can bring back, it is necessary to determine what the shareholders must lose and what the directors must assume.
The opposite argument is attractive because it starts from real suffering. Savers still do not freely dispose of their money, while considerable assets appear on the balance sheet of the Bank of Lebanon. Why keep the metal while families wait? The question deserves a specific answer. Because a payment financed by a public asset can protect a depositor while dispensing a bank, its owners or other debtors to bear a loss. It all depends on the assembly, timing, counterpart and rights held against those responsible.
There is no agreed sale of gold in the items verified for this file that could be presented as a fait accompli. The debate is about possible mobilization. It is therefore necessary to judge the mechanisms envisaged, not to attribute an unproven operation to a person. The challenge is to prevent a promise to return deposits as a justification for a new socialisation of losses.
An asset of 36.80 billion, not a check available
The BDL’s gold valuation reached $36.80 billion at the end of October 2026, according to its official balance sheet as at 31 October, converted at the book rate of £89,500 for one dollar. Foreign currency reserve assets were presented separately at $11.47 billion. The reading published on 4 November by the economic research unit of Crédit Libanais shows a decrease of 1.56 billion in the value of gold in the second half of October. These amounts are dated: they are neither a guaranteed price for a future sale nor an estimate in real time.
Adding these items gives about $48.27 billion of assets in the two categories mentioned. But this total does not represent free cash, fully available to repay deposits. It ignores the commitments, reserve requirements, legal constraints and the difference of nature between a mobilizable currency and a metal that may need to be sold or engaged.
The same precaution applies to valuation decreases. If the quantity remains the same and the price decreases, the book value declines without a ingot being sold. The suspicion of a sale cannot be based solely on the movement of a line expressed in dollars. It would require a transaction, a change in the physical stock, or some other evidence. Defending gold does not exempt from reading accounts correctly.
Legal protection requires explicit public decision
Act No. 42 of 24 September 1986 prohibits the disposal of the Bank of Lebanon’s gold assets, directly or indirectly, except by legislation passed by Parliament. The reserve is therefore not an asset the executive, the governor or a bank negotiation could freely decide on the allocation. Protection extends beyond the word « sale ».
This rule does not legally render any future legislative decision impossible. It establishes a barrier and imposes identifiable political responsibility. If officials wish to cross it, they must present the scheme, its amount, its purpose, its beneficiaries and its risks. The debate cannot be reduced to a technical operation whose consequences the public would then discover.
Nor does the existence of a legal procedure establish the economic relevance of an operation. An authorized sale could remain a bad decision if it finances an unjustified transfer, protects shareholders at the expense of the community or leaves the mechanism that produced the losses intact. The vote does not replace evaluation or transparency.
The scope of the words « directly or indirectly » should lead to the substance of the assemblies being examined. A gold-guaranteed loan, a temporary assignment with a buyback or an instrument giving a right in the metal are not necessarily identical. They may, however, display the heritage without bearing the label of a definitive sale. Their exact qualification requires analysis of the contract and the applicable law; christening them as « valuation » or « optimization » does not make them neutral.
BDL’s gold is not the capital of banks
The separation of balance sheets must remain visible. Commercial banks own assets and owe money to their customers. They also hold claims on BDL. The central bank owns its own assets, including gold, and carries its own liabilities. The fact that these institutions are linked does not erase their distinct responsibilities.
The BDL is a public institution with legal personality. The term « national reserve » does not mean that each citizen holds an individually payable ingot or that the Treasury can use it as a current account. This means that its mobilisation affects a long-term institutional resource, whose destination exceeds the interests of bank owners. The use of a BDL asset does not automatically amount to a budgetary expenditure or a new tax; its collective cost depends on its effects on the balance sheet of the central bank and on public finances.
A bank holding a claim on the BDL cannot deduct, by simple economic reasoning, that a fraction of the gold is already its own. The nature, rank, settlement rules and asset protections should be examined. A claim against a debtor does not automatically amount to a right to seize or receive any of its particular property.
This point is central to both the taxpayer and the applicant. If gold is involved in restructuring, it is necessary to be able to track the transfer of value through all balance sheets. Payment to a bank can benefit its customers, restore its own funds, improve the position of other creditors or combine these effects. Simply stating that the money « is the depositors » does not describe sufficiently who wins and who ceases to lose.
The real beneficiary is not always the one who receives the payment
Direct payment to an applicant may be desirable. But the identity of the immediate beneficiary is not sufficient to determine the final economic effect. If a public institution settles an obligation that a bank should have fulfilled, it can also release the bank from debt. According to counterparties, it takes over a charge without receiving an asset of the same value.
Let us take a hypothetical example. A bank owes 100 to its depositors. Its recoverable assets are worth 60 and its economic capital is already absorbed by losses. A public contribution of only 40 fills the deficit: it does not recreate any positive capital. If the free contribution reaches 45, without fees received in exchange, 5 remain after payment of the depositors. Leaving this value to former owners gives them a property advantage, without guaranteeing that the bank has sufficient capital to resume its business. Payment to depositors may therefore mask a distinct advantage to shareholders.
The result would be different if the old shares were absorbed by losses, if those responsible were replaced when necessary and if the financier received rights corresponding to his contribution. Even in this case, the public cost would still have to be justified. The example shows that the question is not only « are depositors paid? », but also « who was exempted from paying and what did the community get in return? ».
This analysis must precede any mobilization of gold. Otherwise, the debate artificially opposes the protection of a heritage and the protection of injured families. The good comparison covers several comprehensive resolution plans, with their cost, beneficiaries and treatment of shareholders. A transfer of several billions cannot be judged solely from its humanitarian title.
Owners must absorb the risk of their business
Bank capital exists to bear the losses. The dividend pays a risk position, not a right to be protected by the State when that risk occurs. Require shareholders to absorb losses before depositors are therefore not hostile to the private company. It is the application of its logic.
The IMF reiterated this principle for Lebanon in its communiqué of 18 September 2026: the hierarchy must be respected and depositors must not bear losses before shareholders and subordinate creditors. It also calls for a mechanism compatible with the viability of banks and the sustainability of public finances. The purpose of the recall is precisely to prevent the reconstruction of the sector from being based on an impossible promise or an order of reverse absorption.
It is therefore not sufficient for an institution to still display equity in its accounts. These must be recalculated after a credible valuation of its assets. A receivable that is not fully recovered cannot continue to artificially protect the value of the shares to the detriment of the depositors. Similarly, expected future benefits do not replace actual contributions.
Owners who wish to maintain a viable bank must demonstrate their ability to recapitalize it in the required conditions. If they cannot, the restructuring must be able to change ownership or transfer useful functions. Continuity of payments, employment and credit deserve a protection policy. Maintaining each owner in his place is not a national economic obligation.
Leaders must be accountable for their decisions
To absorb capital does not balance the issue of management. Officers and directors are accountable for the risks they have accepted, the information available to them, the approved transactions and the remuneration distributed. This responsibility cannot be replaced by a general formula according to which everything would have been imposed by the State.
The banking sector’s exposure to the state and the BDL amounted to 68.5% of its assets in the IMF’s July 2019 report. The figure does not say that all establishments were identical. It shows that public risk had become a dominant feature of the system, measurable before collapse. The professional institutions which chose this concentration cannot treat applicants as if they had participated in these decisions.
The examination must be individualised. Minutes, committee opinions, financial flows, distributions and transactions with related parties must be reconciled. A wrong decision is not automatically a crime. But it can justify a challenge to management, civil liability or other consequences depending on the facts and the legislation. Waiting for a final criminal conviction to find mismanagement would confuse different levels of analysis.
The sale of a public asset must not become a way of closing these files. Any possible aid must preserve legally justified remedies and recovery possibilities. A settlement that removes responsibilities in exchange for a payment financed by the collective heritage would cost the community twice: in money and in renunciation to establish facts.
Selling does not create a new wealth
A gold transfer turns an asset into a currency. At the time of the transaction, before fees and price changes, it does not create net wealth: one property is replaced by another. The real decision comes in the use of the product. If the currencies are then paid without consideration of the same value, the funder’s assets decline. The repayment of BDL’s own debt reduces simultaneously an asset and a liability. It should not automatically be treated as a subsidy to banks. The analysis must identify the extinguished debt and check whether a bank loss is transferred to the central bank.
This evidence is often obscured by the language of the « liberation » of wealth. Metal can be impractical to pay an invoice immediately, but it remains an asset. Converting it into cash makes it possible to spend ; This does not make this expense free. The same reasoning applies to the sale of public land or participation: cashing is now appearing, the transferred resource will no longer be available tomorrow.
For Lebanon, the opportunity cost is particularly important. A country without normal access to finance and subject to reconstruction needs has fewer alternatives than a state with deep markets and financially sound institutions. Exhausting a reserve to resolve a liability without restoring funding mechanisms can leave the next shock unprotected.
This does not mean that any use of a reservation would always be prohibited by economic logic. This requires an explicit comparison of uses and their counterparts. In this case, the preservation of bank owners is not a sufficient reason to renounce a national heritage. It is up to the transfer proponents to demonstrate why the first solutions to bear the losses would be insufficient.
Lack of interest does not mean lack of utility
Physical gold does not pour coupons. It does not generate periodic income from an obligation or loan. This opportunity cost is real, as are conservation costs and market variations. He must not be defended by claiming that he would be safe or that he would necessarily go up to every crisis.
The World Gold Council itself recalls the lack of regular cash flow and metal volatility. An IMF 2026 note on reserve management also points out that its diversification benefits are conditional and that it is not appropriate for the liquidity band for immediate needs. These are important limits, not arguments to hide.
On the other hand, metal held directly is not the debt of an issuer that promises to repay. It does not depend on the creditworthiness of a government or bank such as a bond or deposit. In a system ravaged by the accumulation of receivables on fragile debtors, this difference has a particular value. Price volatility is not the same as a counterparty’s default risk.
The relevant choice is therefore to manage a reserve with different functions: current liquidity, diversification and heritage protection. It does not involve requiring the same immediate return from each asset. An asset without coupon can be useful in a public portfolio; a paid investment can be dangerous if its apparent income pays an underestimated risk. The Lebanese crisis should have made this distinction impossible to ignore.
An increase in the price does not repair governance
When gold rises, the balance sheet value improves. This can change some ratios and increase the theoretical value of asset recovery. But the increase does not erase the decisions that created the losses and does not automatically produce the currencies needed for repayments. It does not replace bank restructuring or a public revenue policy.
A research note by Colin Weiss, published on the U.S. Federal Reserve site on August 1, 2025, examines the use of revaluation gains in several countries, including Lebanon. In particular, it points out that the Lebanese debt ratio continued to rise after using such gains to reduce certain debts. This precedent therefore does not make it possible to consider re-evaluation as a sufficient solution to structural imbalances.
Double counting should also be avoided. If gold is already valued at a market price in the balance sheet used to estimate losses, then it is not possible to add the full value as a new asset to cover the same losses. The same resource cannot be counted twice, first as an available asset and then as an additional product of its sale.
Plans must therefore display their conventions. When is the metal valued? At what cost? What commitments are taken into account? What part of the gain is already included in the capital or revaluation accounts? Without these answers, a debate on billions can be based on comparisons between different bases rather than on truly additional resources.
Putting gold as a guarantee can move the risk instead of removing it
The argument that borrowing against gold would be sufficient to avoid selling it requires a thorough examination. A loan brings cash, but creates a debt. A guarantee gives the lender a contractual right that can become decisive in the event of non-repayment. Preserving formal ownership for the normal duration of the loan does not mean preserving the assets in all scenarios.
A hypothetical example helps to clarify the problem. An institution commits an asset worth $10 billion to obtain a $7 billion loan. If the price of the asset falls sharply, the lender may, according to the contract, request more guarantee or partial reimbursement. If the borrowed funds have already been distributed and no new revenue has been created, the borrower must find this resource elsewhere. The assembly can therefore convert current political pressure into future financial constraint.
Guarantee haircuts, interest, maturities, revaluation clauses and lender rights must be published before any decision is taken. The competent court and the conditions for the performance of the guarantee must also be specified. These elements are not specific to specialists: they define the situations in which the country may lose control of the asset.
Swaps and temporary operations must be evaluated using the same method. The « temporary » label does not guarantee the buyback or its cost. If restitution depends on dollars that are not secure, the promise to recover the metal reproduces a dependency on future financing. Gold protection must cover the real economic risk, not just the form of the original contract.
Applicants must not become the alibi of a transfer
Gold protection only applies if it is accompanied by a serious policy for depositors. Asking them to wait indefinitely on behalf of the heritage would be another way to make them bear the crisis. It is therefore necessary to articulate two requirements: not to sacrifice the reserve to preserve private interests and not to allow the absence of a solution to continue to destroy the value of their debts.
The needs are not the same. A small saver who finances care, a pensioner dependent on his/her account and a company that has to pay his/her employees have liquidity constraints different from those of a diversified asset holder. Targeted protection can be defended without recognizing all claims, regardless of their size and origin, an identical right to immediate mobilization of public resources.
But targeting must be transparent and verifiable. It should be avoided that an account-by-account limit can artificially multiply protections, that tied parties benefit from preferential rules or that categories are defined after the fact to protect certain interests. Fees must be established on the basis of reliable data with recourse.
Figures rather than a magic amount
The amount announced for a sale does not indicate what part of the problem it would solve. To assess this, it is necessary to know the commitments made, other resources, timing and beneficiaries. A figure of gross product may seem immense while covering only part of a need spread over several years.
Let us consider three deliberately abstract scenarios, without presenting them as adopted Lebanese projects. A mobilisation of 5 billion is equivalent to about 13.6% of an asset valued 36.80 billion. A mobilization of 10 billion represents 27.2 per cent. Fifteen billion is 40.8%. These reports are calculations on valuation at the end of October 2026; they do not determine the quantity that could be sold or the actual price of a transaction.
They nevertheless show the wealth of choices. Qualifying a « partial » operation is not enough to make it limited. Consumption of more than a quarter of a reserve for a financial transfer is a major decision. It would be important to know what sustainable improvement had been achieved, what commitments were actually disappearing and what resources remained to meet the country ‘ s other needs.
Price variation adds uncertainty. A hypothetical 20% decrease would increase valuation from 36.80 billion to 29.44 billion; A 20% increase would increase it to $44.16 billion. These figures do not predict the market. They demonstrate that a plan based on a fixed value of gold must specify who supports the difference if the price changes. Without this clause, a promise of repayment may hide a new implicit public guarantee.
The reservation must be controlled, not only defended
Protecting gold requires more than a political declaration. It requires inventory, information on property and custody rights, appropriate certification and reconciliation with accounts. The public must be able to distinguish between the existence of metal, its value, its legal availability and any commitments attached to it.
Conservation abroad is not in itself a sale. Central banks use depositaries for security and market access reasons. The Bank of England thus explains that an allocated storage keeps the customer the property of precise bars; the asset held for others does not enter into its own balance sheet. This example describes a legal and operational distinction, not the evidence of the custody of each Lebanese ingot.
It is precisely necessary to avoid replacing an international practice with an verified national inventory. Lebanese documents shall establish the places of preservation, quantities, certifications and any relevant restrictions, to the extent compatible with safety. A photograph of ingots or an official visit does not replace these controls.
Transparency should also cover off-balance-sheet liabilities and contracts likely to affect the availability of assets. Such commitments cannot be asserted without proof. But their control is part of a serious audit. A public reserve must be protected against a manifest assignment as against a contractual exposure that citizens would discover only at the time of a dispute.
What the 2023 inspection actually says
A BDL communiqué of 24 August 2023, accompanied by a letter from ALS Inspection UK, provides a material element. The mission, commissioned by KPMG in 2022 in connection with the IMF, focused on gold stored in the BDL chests. The letter describes the weighing and non-destructive testing of ingots, as well as the control of parts. It states that more than 13,000 ingots and 600,000 parts have been handled and confirms the compatibility of the troy ounce content with the quantities reported.
The document announces the sealing of the safe and annual controls. It alone does not prove that all subsequent checks have been carried out. It also does not provide a current certification of all assets held on behalf of BDL abroad. Its perimeter must therefore remain attached to its outcome.
The Lebanese stock is historically estimated at about 286.8 tonnes in the World Gold Council tables; The World Bank’s gold investment guide published in 2024 takes this volume from previous data. This is not a new physical measure dated October 31, 2026. The recent balance sheet value and historical tonnage should not be presented as two observations made simultaneously.
This difference creates a concrete obligation for the authorities: to publish a series reconciling successive inventories, valuation, possible movements and relevant certificates. Such information would make it possible to assess choices on a common basis. It would protect the heritage from opaque decisions, but also from rumours that turn every drop in the price into a charge of metal disappearance.
Taxpayer without bank account also has rights
The debate is often formulated as a face-to-face between banks and depositors. The mobilisation of a public heritage also concerns citizens who do not have a large deposit, those who have never benefited from financial returns and the generations who will inherit institutions. Their interest cannot be erased because they are not represented in the negotiation of claims.
A household without bank savings may have lost purchasing power, deteriorated public services and paid more for electricity or care. Indirectly asking it to finance the preservation of the value of an establishment or the full repayment of large debts must be justified otherwise than by a general invocation of trust.
This distributive dimension should not raise the poor against depositors. Many applicants were themselves impoverished. It obliges us to design a reparation that protects basic needs without transforming the common heritage into an unlimited guarantee of all financial positions. The size of the losses does not automatically give those holding the largest claims the right to determine all public priorities.
The World Bank noted, in its poverty survey published in 2024, a sharp deterioration in the areas surveyed and significant differences in access to income in dollars. This observation recalls that the justice of a plan is not only measured by the percentage of deposits repaid. It also depends on the costs incurred by those who will finance this reimbursement and on the collective costs it could replace.
Alternatives start with institutions’ balance sheets
The first alternative to sale is not another hidden reserve. It is a method of resolution that begins by identifying recoverable assets, recognizing losses and determining the capital actually available. We must separate viable banks from those that are not and not assume that all banks must maintain the same structure.
New private contributions are a different resource from a public transfer. They may come from existing shareholders or new investors, but their reality needs to be verified. Recapitalisation based on already depreciated debts, conditional promises or artificial valuation does not provide the same protection as an available contribution. The plan must specify what can actually finance payments and support credit.
The restructuring of debts and the orderly implementation of assets can then improve the capacity to repay. Expeditiously selling quality banking assets can destroy value; keeping them without perspective can also prolong losses. Arbitration must be based on assessments, management costs and schedules, not on the desire to protect a brand or shareholder group.
Finally, appeals against irregular operations and legally possible recoveries must be advanced. They must not be abandoned in the name of a general agreement or recorded as money already received. The difference between a legal claim and an available resource must remain explicit. Depositors need a credible timetable, not a total adding up optimistic recovery assumptions.
Rebuilding the banking function rather than preserving the owners
A sound banking system is needed in Lebanon. This need does not make the survival of each establishment in its present form indispensable. Payments, new deposits, business financing and household services can be preserved in structures restructured, recapitalised or transferred according to the legal framework.
The Financial Stability Board specifically distinguishes these essential functions from the identity of shareholders. Its principles of resolution seek to avoid major disruption while absorbing losses in the prescribed order. They are not based on the idea that a bank would be protected from the consequences of its management because it provides useful services.
This distinction is decisive for gold. If we start by saying that all institutions must remain intact, the need for funding becomes immense and public heritage appears to be the only way out. If we start with the functions to be saved, the costs can be examined differently: which assets, which teams, which payment systems and what capital are really needed?
The debate must therefore focus on the system to be rebuilt, not on the repair of balance sheets at any price. A bank restored through a public injection without a change in governance can regain an appearance of solvency while retaining the incentives that led to the disaster. A national reserve sacrificed to achieve this result would not be an investment in confidence, but the financing of a risk of repetition.
The refusal to sell must be accompanied by verifiable commitments
Opposition to the sale would be insufficient if it were limited to preserving the metal while leaving the bank records still. It must lead to specific obligations: timing of bank valuation, publication of resolution criteria, recognition of losses, control of contributions and individual information of depositors. The conservation of gold cannot become the pretext for a new expectation without a deadline.
The BDL must also clearly explain its position. In September 2026, Karim Souaid generally opposed a sale, while referring to a possible reflection in case of an impossible obligation to honour and urgent need to pay depositors. It distinguished this hypothesis from State project financing or payment instead of banks. This distinction must be reflected in mechanisms, not only in declarations.
Any project should therefore publish a scenario without mobilization of gold. It would show what bank assets, new capital and other resources can finance. The public could then compare the effects of any intervention rather than be presented with a plan already dependent on a future parliamentary decision.
The final requirement is an obligation of liability. Prior to any further solicitation by the community, shareholders must have borne their losses, managers must have reported on their management and remedies must be preserved. The country is not only short of liquidity; It lacks a regulation that stops protecting decision-makers from the consequences of their choices. It must not be the way to spare them this regulation.
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