Lebanon central bank to start reviewing banking sector

Lebanon central bank to start reviewing banking sector

Lebanon's central bank was to start reviewing the country's banks Monday as it faces international pressure for banking sector reform amid its worst economic crisis in decades.

Lebanese banks had been given until Sunday to increase their capital by 20 percent, among a series of demands from the central bank.

On Monday, a central bank committee "agreed on a roadmap with deadlines for the Bank of Lebanon to take appropriate measures" if these requirements were not met, it said in a statement.

Lebanon is in the grips of its worst financial crunch since the 1975-1990 civil war.

The Lebanese pound has lost more than 80 percent of its value to the dollar on the black market and more than half the population is now in poverty.

For more than a year, banks have largely prevented ordinary depositors from transferring any funds abroad and all but blocked access to their dollar savings.

But reports have emerged of mass capital flight during this same period, sparking popular outcry.

Under the requirements to be met by February 28, banks were also to place three percent of their foreign currency deposits with corresponding banks abroad.

They were supposed to ensure depositors who had