BEIRUT

Local

Cabinet to renew Central Bank vice governors’ terms: source

  • File - People stand in front of the Lebanese Central Bank in Beirut, Monday, Feb. 25, 2013. (The Daily Star/Hasan Shaaban)

BEIRUT: The Cabinet is expected to renew the term of the four vice governors of the Central Bank for another four years during Thursday’s session to avoid a vacuum, a source close to Prime Minister Tammam Salam said Monday.

“It seems that the president, prime minister and most of the Cabinet members want to avoid a vacuum, and for this reason, they will renew the term of the vice governors for another four years,” the source told The Daily Star.

The term of the four vice governors expires at the end of March.

The source said that the ministers would have preferred to appoint new vice governors if they had ample time.

“But in view of the current situation, most of the ministers will vote for the renewal of the vice governors,” the source said.

According to the law, the candidates for the vice governors’ posts are chosen along confessional lines.

In practice, the main confessional parties in Lebanon normally name the candidates for these posts.

It was rumored that MP Walid Jumblatt, head of the Progressive Socialist Party, and Druze leaders want to replace current Vice Governor Saad Andary with one of three candidates from that sect.

But the source stressed that the ministers do not have much time to discuss the qualifications of each candidate, and for this reason, most of the ministers will vote to renew the terms of the current vice governors.

A banker said Central Bank Governor Riad Salameh does not intervene in the process.

“The governor prefers to stay clear from the selection of the names,” the banker said.

According to the Central Bank’s website, the vice governors sit on the bank’s Central Council, which sets monetary and credit policies, including money supply as well as discount and lending rates, and decides on issues concerning the banking and financial sectors, the establishment of clearing houses and loan requests by public sector entities.

Despite the prerogatives assigned to it, the lack of a functioning Central Council will affect neither the performance of the Central Bank nor its role in shaping monetary policies, a source in the banking industry told The Daily Star earlier.

The governor is entrusted with the enforcement of the Code of Money and Credit, and the implementation of the Central Council’s resolutions, according to the Central Bank website. Vice governors assist in the management of the Central Bank, carrying out functions specified by the governor on top of their duties as members of the Central Council.

Sources said that presence of all the vice governors was important to approve any bank mergers, the issuance of a new banking license and expansion of branches.

“With all due respect to the vice governors, Salameh is the main driving force at the Central Bank because he sets the monetary policy and makes all the important decisions,” one banker said.

 
Advertisement

Comments

Your feedback is important to us!

We invite all our readers to share with us their views and comments about this article.

Disclaimer: Comments submitted by third parties on this site are the sole responsibility of the individual(s) whose content is submitted. The Daily Star accepts no responsibility for the content of comment(s), including, without limitation, any error, omission or inaccuracy therein. Please note that your email address will NOT appear on the site.

comments powered by Disqus
Summary

The Cabinet is expected to renew the term of the four vice governors of the Central Bank for another four years during Thursday's session to avoid a vacuum, a source close to Prime Minister Tammam Salam said Monday.

The term of the four vice governors expires at the end of March.

The source said that the ministers would have preferred to appoint new vice governors if they had ample time.

Vice governors assist in the management of the Central Bank, carrying out functions specified by the governor on top of their duties as members of the Central Council.


Advertisement

FOLLOW THIS ARTICLE

Interested in knowing more about this story?

Click here