With Lebanon’s banking secrecy suspended, A&M resumes its audit
Eight months after withdrawing from the engagement, global management consulting firm Alvarez & Marsal is set to resume its review of Lebanon’s central bank.
Lebanon’s central bank has been under scrutiny for months now, after allegations surfaced that the bank had played a central role in the financial corruption which has been plaguing the Mediterranean country for years. In recent years however, the situation went from bad to worse.
According to reports released last year, the central bank – backed by the political establishment and financial services sector elite – setup a Ponzi scheme that provided huge interest rates (of up to 15%) on savings, with the capital attracted from borrowers used to finance the pegging of the Lebanese Lira to the US dollar (at $1 = 1,500LP). Behind the scenes, the scheme benefitted the country’s elite class, who could enjoy decadent lifestyles off their interest income.