The Lebanese public has fallen victim to what could be described as the greatest theft in human history. The amount of stolen funds tied to corrupt practices committed by Lebanese politicians and their business partners since 1990 is estimated to be in the hundreds of billions of dollars. Narrower estimates point to a figure of around $80bn (not to be confused with the separate but … Continue reading The greatest theft in history

While much of Lebanese society has a general idea of who stole the money, though judicial accountability is still pending, it is less frequently discussed the reasons why the money was stolen.  Corruption has been present as far back as the Ottoman era, although it was taken to extravangant heights under the rule of the cartel for the past 30 years.  One could go by … Continue reading Why corruption occurs

One of the top 3 worst economic crises of the last 200 years, the 3rd largest non-nuclear explosion in history, a worldwide pandemic. One could say that the Lebanese suffered one of the worst humanitarian disasters in history. Most countries in the world rarely see more then 3 months of negotiations for coalition governments to be formed. And yet, despite the current conditions, it took … Continue reading Critical Juncture

As the Central Bank of Lebanon, BdL has been a key actor in the unfolding of the crisis, by funding an insolvent state, trapping depositor reserves and enabling an unsustainable Ponzi scheme. While the Parliament is empowered to determine the official Lira rate (Code of Money and Credit (CMC) Articles 2 & 9), the BdL is entrusted to ensure monetary stability and has the right … Continue reading Fundamentals of the Crisis 5) BDL

Lebanon’s economy was a Ponzi scheme. Such schemes can last a long time and even be made to appear legal when state-sponsored, like in Lebanon’s case. These are based on their participants’ confidence in the solvency and liquidity of the scheme. Inevitably, when one of those pillars breaks down, the system collapses. Behind the Lebanese Ponzi scheme, commercial banks played a key role. From lending … Continue reading Fundamentals of the Crisis 4) The Banking Sector

Banks have announced they will be allowing depositors with accounts less than 50k, to withdraw half their savings in dollars, and half in liras at the market rate. This operation is expected to help reimburse about 1 million Lebanese, and cost about $13bn. It remains unclear how the operation will be funded. BdL recently insisted that banks had successfully complied with Circular 154, launched last … Continue reading Bank Withdrawals