Lebanon's Central Bank Governor: Most Banks Complied with Capital Increase Requirement

Lebanon's Central Bank Governor Riad Salameh confirmed on Tuesday that most banks have complied with the requirement to increase capital, although he did not provide further details. The banking sector is at the heart of the financial crisis that has been afflicting Lebanon, which erupted in late 2019 when banks largely froze customers' dollar deposits and banned transfers abroad since then. Salameh had previously made similar statements to the Daily Star of Beirut, stating that the majority of banks responded to a circular demanding an increase in capital. Banks were required, under a circular issued last year, to raise their capital by 20% and the liquidity available with their correspondent banks to 3% of foreign currency deposits, to be completed by the end of February at the latest. Banks were also asked to encourage their major depositors to repatriate between 15% and 30% of the funds they transferred abroad in the past few years. Salameh told Reuters that he would disclose more details when the banking committee completes its report.