Lebanon’s central bank: government should be the one subject to forensic audit

Lebanon’s central bank said on Wednesday the government should be the one to submit its full accounts to a forensic audit, after the caretaker government asked it to provide all requested information to consultancy Alvarez & Marsal (A&M).

Lebanon, grappling with a financial meltdown, hired the turnaround specialist this year for the audit of the BDL. Caretaker premier Hassan Diab said on Tuesday the central bank had only provided 42 percent of the information and criticized it for citing legislation and banking secrecy as a justification.

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BDL said after a meeting of its general board on Wednesday that it had submitted its own accounts to the audit and that the government should be the one to provide state accounts.

“This would spare the central bank from violating legally binding bank secrecy laws”, it said.

Sources familiar with the matter told Reuters last month the central bank was withholding information required for the audit, which is a key demand of the International Monetary Fund and foreign donors pressing the indebted state to tackle waste and corruption.

Earlier on Wednesday, caretaker Finance Minister Ghazi Wazni met with James Daniell, a managing director at A&M, and discussed “options regarding the (audit) contract which will be taken within the next 24 hours”, the ministry said.

A source close to the matter told Reuters the options include putting the audit on hold until a new government is formed, or canceling the contract.

Prime Minister-designate Saad al-Hariri, named last month, has been trying to navigate Lebanon’s sectarian politics to form a cabinet to bring in reforms needed to tackle the country’s worst crisis since its 1975-1990 civil war, including banking paralysis, a currency crash and spreading poverty.

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