The good, the merged, and the bad

ENAR

One year into Lebanon’s economic crisis, country total net losses are estimated at more than 44 billion dollars by the World Bank’s recent report as of early Q2 2020 and as mentioned in the Government reform plan of April 2020 (at a foreign exchange rate estimated at 3,500 Lebanese pounds to the dollar). This results from losses at the Lebanon central bank (BDL), losses in the banking sector, and losses at the government level mainly from the Eurobonds default. In this regard, the banking sector needs a deep restructuring to reorganize its assets and build back the needed trust from its internal and external clients.   The BDL has started preparing the way to such restructuring, mainly in its Circular 154, where it required banks to achieve a capital increase of 20 percent, as well as securing 3 percent of banks’ deposits in “fresh dollars” by February 28, 2021. Banks have