In discussing Lebanon’s economic survival, some local opinion makers and economists have been making nothing but dire predictions since the fourth quarter of 2019. Executive wanted to take the perspective of Freddie Baz, a Lebanese economist, banker, and citizen who has for over two decades been a regular interlocutor of this magazine on banking and economics. The interview has been substantially edited for brevity.  

Although you are not thrown around by the Lebanese storm as some of the people, one could regard you as an observer in the eye of this storm. Knowing that you are someone who has been an economist and strategist in banking for more than half of your life, and knowing that you are a direct witness to the destitution of the people living around you, how does it feel for this economist to sit in the eye of the story and see all this happening? 

It is obviously very, very sad. It is very sad when you look at the lost opportunities in this country. When I was looking at figures and numbers in preparation of our meeting today I found out that since the late Prime Minister [Rafik] Hariri assumed office for the first time in 1992 until the end of December 2019, Lebanon has got $280 billion of cumulative inflows. We could have built a second Singapore, and probably would have needed less [than that amount] to build a second Singapore. We have spent all of this on consumption and imports. 

But does this mean all of us collectively, or is there truth to allegations that there was this or that political figure who imported luxury cars or some economic decision-makers who were solely responsible for all what the country spent on consumption and imports?

If we go into breaking down responsibilities, there are obviously different levels of responsibilities. Being a banker, you are much more responsible than if you are an entrepreneur. Being an entrepreneur, you are much more responsible than a freelancer for the business that you are running. But being a central banker, you are also much more responsible than a banker. Being a minister of finance, you assume different types of responsibilities than a central bank governor. Being prime minister, being speaker, being president… 

One can go into details and examine how the responsibilities should be broken down but if you look in parallel at how much [money] all those successive governments in Lebanon have had since 1992, how much they have spent, we are talking about $250 billion. For what? When I say I am a top-down analyst for Lebanon, it is because for me the main problem of Lebanon is to have never succeeded in building a nation-state. Unless we succeed in building a nation-state, whatever we do, and even if we were to get again $400 or 500 billion [in inflows], and even if the government spends hundreds of billions, we will not reach anywhere.  

What has the role of the monetary authorities been in the context of this absent nation-state?

The monetary authorities by law have a lot of independence and they were supposed to define independent monetary policies. What I mean by independent monetary policies are policies that serve the economic targets of the government. But none of the previous governments have ever had any economic policy or set any economic targets. Have you ever heard about a GDP growth target? Have you ever heard about a headline inflation rate target? Nothing. But instead of volunteering to highlight this to the government, instead of building independent monetary authorities that are serving the purposes of currency stability and [preserving] the purchasing power of people, monetary policies have been accommodating to serve completely distorted financial policies. 

You referred to the financial engineering of 2016 as a turning point of the Lebanese narrative. Have there been one or many turning points that one can point to, for example such difficult and controversial decision points as the initiation and continuation of central bank stimulus packages in much of the past decade?

Every single year, the IMF used to tell [the governor of the central bank, Riad Salameh], “You have to stop this and get rid of it.” But it was serving the purposes of failing politicians. There are definitely many question marks, Thomas, but in my opinion, the biggest error of the monetary authorities—talking about them as an institutional body, not as one person—is that they are responsible, as per the Code of Money and Credit, for two main targets: the currency stability and the financial standing of the banking industry. The focus has almost exclusively been on the first target, and it happened that overdoing it [on the first] was at the detriment of the second target. 

And in terms of talking about governance—because what we are now talking about is the lack of good governance—the issue is that by law, the Banking Control Commission (BCC) is independent from the central bank. They are only administratively linked, so they are on the payroll of the central bank and are occupying offices within the building of the central bank. They have, however, a great if not total independence in executing their job. And at this level too, many things have been accommodated. If one wants to expand on where the responsibilities of bankers start and end—this is linked to the responsibility of the watchdogs supervising them and setting rules and regulations. 

When I say watchdog, you have the central bank and the BCC, but you have also the auditors. To be fair, in every single year in the audit reports, which are public, there was mention that banks are in breach of, I believe, article 156 of the Code of Money and Credit, which imposes a good match of assets and liabilities in terms of duration. Those reports go to the BCC—which never did get back with imposing sanctions or penalties or short delays. Why? Because the reason for this mismatch was to accommodate financial policy by the state, to acquire [treasury bills] and eurobonds, which have much longer maturities than the average life of deposits. 

Over the past few years, we witnessed a stream of fake news and economic conspiracy tales but there was very poor interest in really understanding the Lebanese economy and the banking situation. As of today, there is much academic interest and media interest. At the same time it seems that one cannot be entirely sure about the quality of simplistic and repetitive but uncorroborated media reporting or even the quality of some populist academic analyses. Is it not also adding to the problem and perception of the crisis as it presents itself today that there is a large number of pseudo-economists in the country and that one cannot feel assured on the quality of populist analyses and even some long-distance academic opinions on the very complicated Lebanese situation with its many financial and economic intricacies? 

There are some people who appear nearly every day on television, sit on panels and challenge people who are much more knowledgeable. Also on social media you have a lot of people who have become very popular, people who have no track records. They have excellent writing skills and excellent talking skills. They write funny articles that one enjoys to read and they know how to present themselves on TV as super knowledgeable financial analysts and economists but when you look at their track record, you see that they have been asked to resign from previous jobs because they were totally inefficient. They were responsible for small jobs in small institutions—and today they are icons. 

When I asked you if there was overvaluation of the lira in 2018, based on some assessments by currency strategists at some international banks, you said it is not much overvalued. This was something where I thought that we were differing in opinions.  

You know, at that time the IMF was saying that there could be overvaluation of 13 to 14 percent but the IMF did not say at that time that the lira could reach [a rate of] 10,000 or 15,000 to the dollar. A real effective exchange rate is very difficult to estimate. The IMF are the only technical experts who do this but every year they put it with a lot of reservations—and they don’t give you a figure, they give you a range. This is just to tell you how much of a critical exercise this is. I did my thesis at the Sorbonne with Raymond Barre. He used to tell us money is about perception, it is not fundamentals. Currency is perception, not fundamentals. 

To answer the question about what I told you two years ago, if you came to see me at a point in time when Lebanon was getting $16 billion of yearly inflows, I definitely would say this is a major support to the real exchange rate. This would have determined my opinion regarding overvaluation. But then you will tell me: “You are not assessing the value based on the fundamentals, you are assessing it on the basis of inflows.” Things are different when you have a real economy or when you depend on the diaspora. [However], we would have agreed that [the lira] is not overvalued by a large amount. It all depends on the question: Are the grounds [that we were standing on with the lira peg] solid? No. But still those inflows were supporting the real value of the currency. 

The assessment of the overvaluation in 2019 and 2020 was indeed a totally different ballgame. But what created the conditions that led to the total meltdown of confidence? With my humble capacities I got stuck looking at it under the framework of Hyman Minsky’s Financial Instability Hypothesis.

Let me say something to make things more precise. Banks have placed a lot of money with the central bank but without being overly curious to see how this money was being spent. But knowing that the part of this money [which was committed to] financing the state is limited, there is a confusion. It is not that banks were placing customer deposits in hard currency at the central bank knowing that of every dollar we were placing at the central bank, 60 or 70 cents would go to financing the government. What was the amount of eurobonds held at the central bank? $7 billion. The central bank was buying TBs in local currency while the issue today is about a financing hole in hard currency, a hole that was not necessarily used to finance the state.

What created the hole then? 

In my opinion, under the Minsky definition, the central bank was paying 6 to 7 percent on average on USD deposits, so if you have $80 or 70 billion, or two years ago, $60 billion, that makes $5 billion of yearly interest [payments]. There also was other spending. I have done some calculations on the turnover of financial engineerings. If you look at four items from end-December 2015 until end-December 2019, [namely] increase in bank deposits in USD, the reduction in bank loans in USD, because this is a new liquidity that has been generated, the reduction in banks’ liquidity with their correspondents abroad—the real BIS [Bank for International Settlements] liquidity as they call it—and at the reduction of banks’ eurobonds portfolio, it gives you an idea about the real liquidity generated by banks that has been used in the financial engineerings. You have four assets that have decreased and been replaced with one asset, which is deposits at the central bank—we are talking about $36 billion cumulative in the period from Dec 2015 to Dec 2019. When you look at the [net foreign assets], NFA at the central bank in Dec 2019 grew by $300 million with respect to Dec 2015—I am talking about the period of financial engineering. There was a turnover of $36 [billion], which should have propped up the NFA. But obviously everything that the public and private sectors have received and paid as dollars is embedded in the [BOP, balance of payments]. We have an adjusted BOP deficit that has conceptually consumed $14 billion dollars of the NFAs of the central bank. There have been $4 or 5 billion in cash withdrawals, people hoarding at home. Banks took this money from the central bank, so deposits have decreased.  [Adding] 14 and 4 is 18, [accounting for] $18 [billion] out of $36 billion. Where are those [$18 billion]? The answer for me is that most probably a big part of the financial engineering did not translate into new cash generated as much as it was rolling over [and paying out interest on] existing deposits that were maturing. But unfortunately at a high cost. 

Are we then in an episode of hyperinflation? 

Yes, of course. We are in hyperinflation because the price structure is today benchmarked on the parallel market rate—which is, in my opinion, wrong. The minister of economy should have taken steps [to regulate] how people are billing today, invoicing today. In our case, hyperinflation is imported, it is not locally induced.

What is the definition of hyperinflation? I was under the impression that it is 50 percent inflation per month. 

The 50 percent per month, which leads obviously to high three-digit increases on yearly basis. This is the definition. 

So where do you see inflation go by the end of 2020 or in 2021? Can one have a rational expectation? 

For me, that is as if you are asking to give my views on the exchange rate. When you convert your new prices denominated in local currency at the parallel market exchange rate, then they are almost the same, or some prices in USD have decreased. 

But there is a very important point [about dollars created in Lebanon], which very few people understand. In 1992, at the start of reconstruction when Hariri came and brought new prospects, we had $4,370 million dollars of resident deposits—$4.4 billion. By April 2020, we have $88.9 billion. People believe that the process has been auto-nourished by interest—but this is wrong. If you take the average yearly interest rate on USD, the $4.4 billion of 1992 deposits would have become $10.3 billion today, at the real average weighted rate of 4.5 percent over the period.

What contributed to the increase in resident USD deposits—if a country allows this, and Lebanon allows—are the cumulative surpluses of the BOP. Over this period, we have $20.5 billion of contributions from BOP [money brought into Lebanon and deposited into local bank accounts]. When I calculate 88.9 minus 10.3, which is the accrued interest, minus 20.5 which is the real contribution of the foreign sector, what remains is $53.6 billion. Those have always been Lebanese dollars since inception. It is not that these used to be real dollars and are lollars today. The people talking about lollars do not understand the principle of credit multiplier in USD. Loans create deposits. Not deposits make loans. 

It was one of the errors of the governor that he promoted dollarization and always tried to consolidate it and push it even farther. When you tolerate lending in USD, then you provide banks with the power to create Libano dollars, as we labeled it in the early ‘90s. When you tolerate the credit multiplier of lending in USD you create deposits in USD that are produced in Lebanon. Those $54 billion have from their inception been produced here in Lebanon. Let’s say you come to me, the banker, and ask for a million dollars to build a factory. This million is broken down in three parts—$300,000 to buy the land, $300,000 for constructing the plant, and [$400,000 as] money to obtain raw materials etc. When you buy the land, the owner gets a check and deposits it. This loan that I have created has generated a lot of waves of Libano dollars. When you see loans in USD, they used to be $2.1 billion [in the early ‘90s] but reached $24.9 billion  of domestic loans in foreign currency in April 2020 , out of $39 billion total loans, resident and non-resident in all currencies. So [advancing] from $2 [billion] to $25 [billion], the [loans] increased by $23 [billion], times the credit multiplier, which is 2.4, this is what has generated those $54 billion Libano dollars. So you are not 100 percent eligible to transform this into real dollars either by transferring it abroad or transferring it locally into cash. 

The system works as long as you have enough of a monetary base in USD. This monetary base is the liquidity that central banks maintain abroad, meaning real liquidity that some call BIS liquidity [in reference to the Bank for International Settlements, the Basel-based organization of the world’s central banks]. What happened in Lebanon was that hoarders of Libano dollars were allowed to transform them into real dollars. As long as you have 20 or 25 percent of your resident US dollar deposits [in form of] real BIS liquidity, you can manage. But when the ratio goes to 12 or 10 then you have an issue. It is true that you still have 8 or 10 percent, but what if there is a lack of confidence and all the owners of Libano dollars want to convert to real dollars? That is why in an interview in October 2019 I urged the central bank to immediately stop domestic clearing [meaning to withdraw from facilitation of dollar-denominated transactions among Lebanese financial institutions] in USD. It was still a good time before the total fall of confidence, and it would have provided much more flexibility. 

What is your view on capital controls? Are they coming in at any moment and how can they help us?

I used to criticize the government for handling the situation as if the remaining stock of real reserves, the strategic reserves for fuel, medicines, wheat is [all there is]. [This means] acting as if we need to optimize the use [of these reserves] and have no prospects for any replenishments. This is the worst situation, because if you start thinking like this, you forget about any means or way to replenish and adjust. I hate this. But today, with respect to the reality of them doing nothing and, as matter of fact, having seen that the recent visits of presidential envoys to the Gulf did not bear any fruit … [this door for seeking replenishment appears to be shut].

I was trying to analyze monetary flows over the last five months because the central bank has just published the May figures. Just to give one meaningful example, total deposits decreased by $12.7 billion in five months [Jan to May 2020]. This is slightly higher than the full year 2019, which saw [decrease of] $11.3 billion. But when you look at the breakdown [of the 2020 decrease], $9.4 billion is coming from resident and $3.4 [billion] from non-resident deposits. In parallel, total loans decreased by $6.8 billion. Loans [generate] deposits but redemption of loans decreases deposits. Obviously, when you pay back the loan and it is not renewed, this is destruction of currency. Looking further at resident and non-resident figures, $3.4 billion of the deposit decrease [occurred] in the non-resident part, in a context of only $300 million of loan decrease. This money most probably left the country. You obviously have to put up a barrier. As long as you are not considering your available resources, you have to put an end to any leakage with capital controls today. We are talking in terms of months of survival. 

It is critical [to have capital controls] but in my opinion it is not enough because what I said also last year in November, was that Lebanon needs to put quotas on imports. You do not only place capital controls on money outflows. You have also to put quotas on imports. In the first five months of this year, imports decreased by 46 percent when compared to the similar period of last year. But we still had $4.3 billion of imports. It seems that fuel, medicine, and wheat represent 50 percent of this amount. This means there are many things that are still being imported but that are not essentials. I got some mails yesterday from wine shops that told me that they got new arrivals of French wine. Or let me take the example of the blue cheese that you like. It is a luxury. When you put a quota on imports, those imports will not be allowed at this time. In my opinion, we need to manage our external financing needs wisely by limiting them to the minimum, [which] also means quotas on imports, especially [luxuries].

So you say we need capital controls and import controls?

Of course. During the transitory period. 

For how long in your opinion?

In my opinion, you have to implement capital controls for five years minimum. If you want my deep belief, no prospects before ten years. There are 115 billion of Libano dollars today in the banking sector. If you take the central bank net reserves and add the liquidity of banks with their correspondents abroad which is still available, and deduct all correspondent banks’ deposits still existing in Lebanon, you get $14.4 billion at end of May versus $115 billion of total liabilities in USD in total banks. If you remove the capital control after one year, what would happen? 

What is your view on the divergent financial assessments between the government’s plan and the plan of the parliamentary committee?

The issue for me is not the loss assessment controversy of LL240 trillion versus LL120 trillion, as long as whatever assessment you take represents a multiple of financial system equities. We are technically bankrupt. But to be fair, the assessment of the government and their advisors is much closer to reality. But the major discrepancy and issue for me comes from the spirit of both plans. The government drafted its plan with a resolution spirit. The commission answered with a plan that has a recovery spirit. These are legal terms, and there is a major difference between resolution and recovery. Every bank by law needs to provide the Banking Control Commission every year with a recovery and resolution plan. Recovery plan is when you are facing a major challenge but still have the means, although costly, to adjust. Resolution is when there is no recovery possible and you have to sell a subsidiary, add immediate capital, or are forced to merge. The government drafted a plan with a resolution strategy whereby the other [plan] says that with time, things can be managed. As an external observer who is also an insider, because I know not only the banks but also the economy very well, nobody of both parties has convinced me about their idea. Because nobody in his plan—when saying these are the losses and this we should move to clean up the financials and restructure—addressed what will happen one day after [this process has been done]. If we do the write-off of shares and the bail-in through depositors, we will get debt to GDP to a sustainable level and the central bank balance sheet will become clean, and the Lebanese banks will become a good bank. I reduced my assets and my liabilities, and all my liabilities have been converted and frozen into assets, meaning higher quality but frozen. So I don’t have liquidity. 

To use the banking system again, in order to make the economy take off, for me there is something material which is missing: We need to get new liquidity in order to pay back depositors and launch new waves of productive loans in order to have this economy lift off. Nothing of this has been mentioned. 

What do you think of other plans, such as the plan of the Association of Banks in Lebanon, that seem to be competing with the government plan and the plan by parliamentary commission?

I believe that the parliament and the government have discussed closely with the central bank and the ABL. The spirit of the document of the parliamentary commission reflects the ABL and the BDL [perspectives]. I position myself toward something different. 

The bottom line [of two earlier reports by IMF and World Bank is that] in order to create 60 or 70,000 jobs a year, and catch up with the upper range of middle-income countries, Lebanon needs between $15 and 20 billion of yearly investments over ten years. [We need the] nation state, and we need as soon as possible to agree on two very strategic MoUs—one I will call defense strategy between the state and Hezbollah, because this reality cannot help Lebanon attract any foreign investment, which today is at the heart of the problem. We have to solve this duality and I am talking political economics, not politics. We need to favor an environment capable of helping Lebanon attract investments.

The second MoU I will call a new social contract, but between real output partners. Not a social contract from a political standpoint. We need to assemble together economic associations [and] labor unions, under the sponsorship of the state, and as the observer civil society, which can help adjust policies because of their power in order to define a new social contract whereby each party has to agree upon the level of sacrifice that they need to make—I won’t recommend reducing real salaries but people will need to work more for the same salary. Likewise, entrepreneurs need to accommodate much lower [internal rates of return] on their investments in order to help the machine to take off. 

This sounds like things that are doable if you have the right spirit.

You need good people, you need a good government, you need a nation state with [all its functioning institutions]—you need citizenship and governance. We also need to have very strong planning and thoroughly assess our competitive and comparative advantages. God provided us with many advantages in terms of geography, geology, and human resources. We need to build on those comparative advantages. There is a lot of talk now that we need to promote export industries, yes, definitely, but in my opinion the priority is much more on the level of import substitution—we need to promote import substitutes.

What do you think on the subject of bank restructuring? Will it happen, can it happen? Is there a formula? 

With respect to the materiality of the problem, there is going to be a huge restructuring which would require fresh money. [Restructurings] require fresh money and under the current conditions I don’t see any possible appetite or interest from whatever investors to come and inject money. First of all, I believe that everyone who is responsible, should pay. It is very difficult for me to say this because I have been a member of management and it is a responsibility from anything I did. But I have been consequent with myself [and my principles] when I resigned because I had divergent views with my colleagues on how to go forward. 

When I decided myself to quit at the bank, there were no prospects of the additional problems [that happened later in 2019]. When I made my decision, it was only based on what I have seen as normal development with respect to all those accumulations requiring adjustments in strategy and asset utilization, without the sufficient leverage to make things happen. So I have decided to withdraw although at the time when I decided [this meant] big sacrifices of position, authority, and also money. 

But we are talking about governance and now are focusing on banks, we need to restore, as quickly as possible, very strict governance of banks. This is a necessity.

This includes the central bank, its governor, and all the boards of banks and the managements? 

I don’t personalize and I believe in the sacrosanct principle of innocence until proven guilty but in my opinion it is clear that there are super-negative vibes toward the governor [coming] from politicians. This has expanded to civil society. The governor has become a target. The governor’s main added-value in the collective sub-conscience was that he was guaranteeing the stability of the currency. As long as the currency is collapsing today and there are those negative vibes, why we are still [not acting for change]? Probably a change to a new style, new approach, new name, this is part of the countenance to restore. 

How about the protection and preservation of jobs in the banking industry? Are we looking at a significant contraction? 

There is progress toward negotiated layoffs, which is the opposite of what is happening elsewhere, and [happening] so far to acceptable levels. There are plans for 200 or 300 employee [layoffs] at big banks. We are talking about a banking sector with 26,000 employees. I won’t be surprised to see a 10 to 15 percent reduction. 

Do you see a rebuilding of the banking industry with regional offices and subsidiaries abroad, or perhaps by bringing in foreign banks? Why would foreign banks be interested in coming into Lebanon?

Which foreign banks? They all left Lebanon. In my opinion we need to consolidate but under today’s Lebanon political conditions and embargo at all levels, consolidation will add losses without necessarily generating savings. We need to have fresh capital in order for consolidation to make sense. What is needed is to generate real savings. As long as staff represents 60 percent of expenses, real savings come from staff, as there are overlaps of highly paid c-levels, of branches, and duplications of subsidiaries. But there also are large impairments and I am not sure that financial synergies coming from mergers would by themselves be enough to offset the impairments. What is needed is to restore the ability to get new, fresh money in order to be able to launch new waves of good loans. 

What do you think of the project of a banking restructuring commission at the central bank? 

I don’t know about the people [that have been appointed]. I don’t know how much experience they have in this field. I have worked on a lot of [acquisitions and consolidations] and know that this requires a lot of skills and knowledge.

Will the forensic audit of the central bank provide a turning point? 

The connotation is not good. They are focusing on the central bank as if this is where the problem is and where you smell ‘onion and garlic.’ The successive governments as I told you, from 1992 until last year, spent $250 billion in aggregate. Two different knowledgeable ministers [in the previous government], representing two different political parties, Ghassan Hasbani and Ali Haj Hassan, said several times that the magnitude of waste and corruption in Lebanon represents 11 percent of GDP (Hasbani) and represent $6 billion (Hassan)—which corresponds to 11 percent of GDP (at the time). If we take the cumulative formal GDP of Lebanon from 1992 until today, this is $820 billion, 11 percent [of that] is [over] $80 billion, $84, 85 billion. 

We [furthermore] did a lot of analyses on the revenue gap in the budget, the main component of which is tax evasion. A lot of Lebanese are good tax payers but there are many inefficiencies that relate to the fiscal administration. This is another 9 percent of GDP. So what is the aggregate foregone income, which relates to corruption, waste, and uncollected taxes and revenues? $160 billion. 

Now I will start with my forensic audit at the level of the public administration of Lebanon, because the $250 billion that have been spent over 28 years, to see how much each ministry has spent and how it was spent in order to see how we can recuperate part of this. We also have to do the forensic audit of the Ministry of Finance: Why there are $80 billion of uncollected revenues over 28 years? Include the central bank, because nobody can argue against the growing opacity in central bank accounts over at least the last ten years. I can understand that the government is asking a new company to do a new audit of the central bank but it would have been much more eloquent and rational for the government to ask for a comprehensive audit of all public administrations, ministries, and funds that report to the prime minister. To start with just a forensic audit just of the central bank is pretty bad.

Every proposal for the rescue of the economy included some form of public asset management fund or defeasance fund. How can one in the current period of economic crisis and global recession reliably evaluate assets for such a fund, especially assets of supposedly revenue generating state-owned enterprises? 

Numbers need to be adjusted with respect to recent developments but it is not a very difficult exercise. Normally valuation for a company like Middle East [Airlines] is based on EBITDA [Earnings before Interest, Taxes, Depreciation, and Amortization] and reconfirmed by net asset value. But the issue for me is the principle itself. I don’t understand populists who are saying that the assets are the people’s assets. You cannot say that the public assets belong to the Lebanese population and cannot be touched, [but argue] as if the national public debt of Lebanon is not a burden of all people and impose on others, which are the big depositors, to pay our debt—this is ridiculous. 

What is the quality of our assets?

I personally believe that the net equity position is negative, even if I include the net present value of oil and gas at the initial level of reserves that has been [announced]. As per my calculation, at £93 billion of debt today and minimum $5 billion of arrears, which are not included in the debt, the net position is negative. Assets do not allow to cover [this debt] but if allocating a part of assets can help safeguard depositors’ interest in banks, I will do it. The central bank is holding public debt that it is not supposed to and the [discussion is] to write off the government debt and for the government instead to give assets to the central bank. Those assets will allow covering the gap between bank deposits and remaining resources and we can start talking about how we can pay over time, in order not to affect depositors. Banks can then negotiate with depositors. You need to be innovative. But whatever else we are talking about, Lebanon needs immediately about $20 billion to $25 billion of fresh liquidity. If we don’t get this, nothing works. No consolidation of banks, no debt restructuring, no central bank balance sheet cleaning.