Riad Salameh

 Business, News

Salameh: New anti-laundering laws

(BEIRUT, LEBANON) — Lebanese Central Bank Governor Riad Salameh revealed new measures taken by Banque Du Liban to tackle money landering in Lebanon on Thursday.

“Lebanon issued Law No. 318 on fighting money laundering, which gave birth to the SIC (Special Investigation Commission), an independent entity affiliated to BDL, whose mission is to efficiently fight all kinds of money laundering activities,” said Salameh.

Salameh announced these measures at the two-day “Governance, Risk and Compliance Summit” hosted by Thomson Reuters, which gathered regional and international bank leaders to discuss monetary trends in Lebanon and the Middle East.

Salameh said the new measures will regulate cross-border transportation of cash and tackle tax evasion. He also introduced the “Financial Stability Unit,” which will monitor the financial sector in Lebanon.

“We are in the process of establishing a Consumer Protection Unit to ensure that banks deal equally with all their customers in a transparent manner,” he said. “We have issued circulars requesting banks to establish compliance and risk management units, to appoint independent members in their board of directors, and to create a remuneration committee whose members are chosen among the board’s non-executive members.”

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 Business

Salameh: More cash to stimulate economy

(BEIRUT, LEBANON) — Lebanon’s Central Bank is considering pumping more money into the economy after commercial banks used up most of the $800 million provided in credit facilities in 2014, its Governor Riad Salameh said Wednesday.

The Central Bank announced a $1.46 billion stimulus package in 2013 and followed it in 2014 by another $800 million in credit facilities to commercial banks at 1 percent interest rate. The stimulus mainly targeted the real estate sector with more than 50 percent of funds reserved for housing loans.

“The funds have been almost used completely and we are looking at increasing that package,” Salameh said at a joint conference with the International Monetary Fund. “This package provided 50 percent of the growth that we saw in 2013. We did the same for 2014 and we are pleased to see that the credit enhancement we did was successful this year.”

The Central Bank also played a role in creating employment by providing incentives to commercial banks to make equity investments in startups or venture capital funds, Salameh said.

Under circular 331 issued last year, the Central Bank guarantees up to 75 percent of the value of banks’ investments in startups or VC funds. A commercial bank that agrees to invest in startups receives seven-year interest-free credit from the Central Bank that can be invested in Treasury bonds.

The total contribution of the program to the economy could reach $400 million, provided that commercial banks invest 3 percent of their total capital, which is a limit set by the Central Bank.

The Central Bank will continue with the same strategy that helped create employment, according to Salameh, but will pay close attention not to trigger volatility in interest rates and maintain the stability of the Lebanese currency, he added.

“This trend is going to continue but we are doing it in a way that will not put at risk the stability of the Lebanese pound and will not expose the banks to unusual risks,” he said.

Lebanon’s economy has been hit hard as a result of the spillover of the Syrian conflict, according to the “Regional Economic Outlook: Middle East and Central Asia” report unveiled by Mohammad Elhage, director of the IMF-Middle East Regional Technical Assistance Center.

Real GDP growth has declined from an average 8 percent during 2009-10 to 2 percent in 2013, Salameh said.

Political paralysis and sporadic violence in Lebanon have deterred Gulf tourists and investors, hitting hard the real estate, tourism and service sectors.

“The travel bans pushed the Central Bank to take steps to stimulate local consumption,” Salameh said.

The influx of Syrian refugees to Lebanon, which has reached over 1 million, one-quarter of the country’s population, caused $2.6 billion in direct costs over the past two years and around $5 billion when taking into account lost opportunities, Salameh said.

However, the governor said several recent surveys are pointing to an improved economic sentiment, though the official growth forecasts for 2014 will not be released by the Central Bank before August.

 

Source: The Daily Star

Original Article

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 News

Salameh: Banking sector should remain apart from political disputes

BEIRUT: Central Bank Governor Riad Salameh Saturday expressed gratitude for those nominating him for the presidential election, while explaining that he had refrained from announcing his candidacy to keep the Central Bank isolated from politics.

“I thank the trust given to me as a presidential candidate, but my concern is for the Central Bank to remain at a distance from political bickering, which is why I do not take any initiative in that regard,” Salameh told a local television station.

Salameh, who has been the governor of the country’s Central Bank since 1993, is seen as a consensus candidate in light of the absence of any agreement on a single political candidate.

Last month, Lebanon has entered its two-month constitutional period to elect a new president, the country’s top Christian post.

In his interview, Salameh also spoke about the decline in the tourism industry, saying Gulf countries’ travel advisories on Lebanon had damaged that sector.

“The fact that Gulf tourists refrained from traveling to Lebanon has negatively affected the Lebanese economy because Lebanon relies heavily on tourism from Gulf States,” he said.

Salameh offered reassurances that Lebanon was still able to “finance its needs with stable interest” because of the trust in the country’s banking sector that allows for the flow of foreign funds to Lebanon.

He also said Lebanon was in line with international and Arab resolutions, particularly in terms of economic restrictions.

“ Lebanon is concerned with respecting international and Arab resolutions, and banking measures have been taken to ensure that Lebanon does not deal with money either from Syrian institutions or figures if we receive warning from any of the countries we deal with,” he said.

Source: The Daily Star

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 Business

Staff compensation holding back Standard Chartered sale

BEIRUT: All hurdles except one have been cleared in the pending acquisition of Standard Chartered’s retail operations in Lebanon by Cedrus Invest Bank, a source involved in the negotiations told The Daily Star Friday.

Over three months of negotiations, the two companies have managed to settle terms on price, taxes and hundreds of technical issues, but the fate of Standard Chartered’s employees remains an issue of contention holding back a final deal.

“Standard Chartered is negotiating with their staff on the proper compensation scheme once the retail business is sold to Cedrus,” the source said. “But these talks have lasted longer than expected.”

He added that according to the agreement, it was up to Standard Chartered to compensate any employees who do not want to be part of Cedrus.

London-based Standard Chartered has 100 employees in Lebanon.

Cedrus has expressed interest in keeping some of the Standard Chartered employees, while the rest are to receive a compensation package from London.

The source declined to predict when the talks between Cedrus and Standard would be concluded but stressed that the most difficult parts had been resolved.

Cedrus, which is mainly specialized in management of funds and wealth, is keen to expand its business to commercial banking.

Standard Chartered has decided to sell its retail operations in Lebanon as part of efforts to pull back from emerging markets.

The bank has three branches and a license to open two more. Standard Chartered will keep a representative office in Beirut once the sale of the retail business is complete.

Both sides have refrained from giving details about the talks but sources estimated the deal at around $24 million-$27 million.

Central Bank governor Riad Salameh told The Daily Star earlier that he had no objection to an investment bank acquiring a commercial bank in Lebanon.

The Central Bank must approve any bank merger or acquisition before the concerned parties sign an agreement.

Source: The Daily Star

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