Preliminary audit report slams Lebanon central bank, governor

Preliminary audit report slams Lebanon central bank, governor

BEIRUT: A preliminary forensic audit of Lebanon’s central bank by professional services firm Alvarez & Marsal (A&M) has painted a damning picture of the institution under long-serving former governor Riad Salameh. Since late 2019, Lebanon has been mired in an economic crisis that the World Bank has dubbed one of the worst in modern times, but officials have largely failed to take action to stem the collapse or implement reforms demanded by creditors.

An audit of the central bank has been among the top demands of creditors as Lebanon seeks bailout funds. The financial position of the central bank (BdL) “deteriorated rapidly” between 2015 and 2020, according to a leaked copy of the preliminary report which was seen by AFP on Friday.

“However, this deterioration was not reported in BdL’s balance sheet presented in its annual financial statements, which were prepared using unconventional accounting policies,” it said. Those policies allowed the central bank “to overstate assets, equity and profits while understating liabilities”, it added. Former governor Salameh, who left his post at the end of last month, is widely viewed as a key culprit in the country’s dramatic economic crash.

On Thursday, Britain, Canada and the United States announced sweeping sanctions against the