Lebanon's central bank to take over banks that cannot boost capital
The central bank is giving Lebanese banks until February to increase their capital by 20% or give their shares to the government amid fears that people's deposits are at risk.
Lebanon’s central bank is demanding other banks in the country increase their capital or face a takeover from the government. The order is an attempt by central bank authorities to up the amount of cash in the country’s banks amid fears that people’s savings are at risk.
The central bank's governor, Riad Salameh, said the banks have until February 2021 to raise their capital by 20%, Reuters reported Thursday. The bank issued a series of new regulations Thursday amid the ongoing crisis in the country.
Under the stipulation, the banks must bring in more capital from outside the bank. If not, the central bank will take their shares.
Lebanon is in the midst of a severe, monthslong financial crisis. Protests against poor economic conditions and corruption began in October. Since then, lockdowns to mitigate the spread of COVID-19 have further contributed to job and income losses. The Aug. 4 Beirut port explosion further exacerbated the situation.
