Caretaker Prime Minister Hassan Diab recently took a jab at the central bank when he warned against the attempt to foil the forensic audit of the Banque du Liban (BDL), which has reached a stalemate due to the absence of necessary documents.
On Wednesday, the central bank indirectly responded to the premier’s remarks, affirming that it is the government that should submit its full accounts to the Alvarez & Marsal firm for a forensic audit to take place.
Reiterating a previous statement, the BDL said that it could not submit such information because doing so would violate Lebanon’s banking secrecy laws.
The audit in question is an essential step toward fighting corruption and implementing the necessary reforms that the international community and the International Monetary Fund require of Lebanon before providing it with much-needed financial assistance.
However, the central bank refrained from answering a substantial number of the auditing firm’s questions and refused to hand over many documents – all of which are vital for the audit to proceed – claiming that doing so would violate the law.
In taking that firm stance, the BDL has forced the important process to pause.
As to whether Alvarez & Marsal will discontinue the audit entirely, this should be made clear on Thursday, November 5th, when the firm is expected to make its final decision on the matter, as per a government source that spoke to The Daily Star.
Notably, the same source dismissed the BDL’s claim that all the information for the state’s accounts was with the Finance Ministry.
The source explained that the company “wants to carry out forensic auditing of BDL’s accounts and not the state’s accounts,” adding that Alvarez & Marsal is “surprised” by the attitude of the central bank.