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Veteran Lebanon’s Central Banker Quits Position With Legacy In Tatters

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Riad Salameh, who was once hailed as a financial whiz, is leaving his position as governor of the Lebanese central bank on Monday. His reputation will be tarnished by the terrible collapse of Lebanon’s banking system and corruption allegations both domestically and internationally.

Salameh was widely regarded as the center of the financial system until it collapsed in 2019, leaving many Lebanese in poverty and freezing most savers out of their accounts in the formerly burgeoning banking industry. This caused Salameh’s reputation to disintegrate.

His reputation was further damaged when other European nations started looking into whether he had misused his authority to steal a significant sum of Lebanese public funds.

Days before he left, Salameh told Reuters that he had “worked according to the law and respected the legal rights of others” throughout his time in office. Salameh has denied any wrongdoing.

The factions that control the government engaged in decades-long corruption and wasteful expenditure, which led to the financial collapse of Lebanon. Many Lebanese blame Salameh and those groups for the collapse that has reduced the value of the currency by 98%.

Salameh defended his position in an interview on Wednesday, claiming that the central bank was not to blame for the financial crisis and that the government was in charge of spending public monies. Salameh, 73, told the broadcasting company LBCI, “I am going to turn a page of my life.”

Central Bank Was ‘Shattered’

For a guy who was once considered a potential president, it has represented a remarkable turnabout. Salameh gained a reputation as a capable manager of the financial sector after assuming control of the central bank.

Despite having high-level support from the ruling politicians, many of whom were militia commanders during Lebanon’s 1975–1990 civil war, this image separated him apart from them.

He frequently attended opulent financial conferences, was lavished with banking honors, and had extensive authority as governor.

In 2016, Salameh kept the system afloat by stealing money at exorbitant interest rates from regional banks. Because it relied on new borrowing to pay off old debt, critics dubbed this a “Ponzi scheme”.



Source: cbs News

The BDL offices are guarded by walls covered in graffiti that expresses the resentment people have towards Salameh

The focus of the corruption investigations is on fees that the central bank charged banks for buying government assets, with the money from which going to Forry Associates, a business owned by Raja Salameh, Salameh’s brother.

The Salameh brothers deny any wrongdoing and deny diverting or laundering any public monies. “Neither directly nor indirectly did any money from the Central Bank go to Forry,” Salameh stated in the interview on Wednesday.

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