Lebanon Banks Say Liquidity Falls Short of Recovery Plan, Risk Insolvency

Lebanon’s commercial banks lack the liquidity required to repay depositors under a government proposal aimed at plugging an $80 billion gap in the financial system, an adviser to the lenders said, complicating an already difficult negotiation to kick-start the country’s economic recovery.

“Our liquidity analysis suggests that most banks do not have the capacity to meet the required payments during the initial four-year period,” said Fernando Batlle, head of global strategic advisory at Ankura, which local banks hired to lead negotiations with the central bank and the government.