With the approval of 17 ministers and the opposition of seven aligned with Prime Minister Nawaf Salam, Lebanon’s cabinet appointed Karim Saeed as the new governor of the BDL
The decision comes at a critical moment for a country grappling with severe financial distress, compounded by ongoing political and economic crises, as well as the recent war between Hezbollah and Israel, which inflicted millions of dollars in losses on the state’s finances.
Saeed was chosen to succeed Riad Salameh, who is currently under arrest on charges of embezzlement of public funds. Salameh’s term had officially ended in 2023.
During the Cabinet session, 17 out of 24 ministers voted in favor of Saeed’s appointment.
The position of Lebanon’s Central Bank (BDL) governor is a critical one, especially in a country that urgently needs to implement key reforms demanded by the international community.
Saeed is expected to play a key role in restructuring Lebanon’s commercial banking sector and addressing the estimated $72 billion in financial losses caused by the country’s economic collapse, a crisis that has impoverished most Lebanese and devastated the local currency.
Lebanese media outlets have shared details about the new governor, describing him as a prominent figure in banking and financial investments.
His background
His professional background combines academic expertise with significant real-world achievements. Saeed served as the General Manager of Investment Banking at HSBC from 2000 to 2006, overseeing key financial operations and strategic initiatives. In 2023, he spearheaded a study on Lebanon’s financial recovery through Growthgate Equity Partners, aiming to outline a roadmap for restoring stability to the country’s banking system.
Over the years, he has gained extensive experience in banking and investment, contributing significantly to privatization and financing initiatives across the Middle East. He has also been instrumental in developing economic solutions to Lebanon’s financial crises.
The appointment had been widely anticipated, particularly in light of the legal troubles facing former governor Riad Salameh, who has been pursued on financial misconduct charges both locally and internationally and has been in detention since September 3, 2024.
The decision also reflects the need for a permanent central bank governor, following several months of interim leadership by Wassim Mansouri after Salameh’s arrest.
No more trust?
In Lebanon’s sectarian power-sharing system, the Central Bank governor is traditionally aligned with the President’s policies, much like the army commander, both of whom are typically appointed by the cabinet with the president’s tacit endorsement. These positions are historically reserved for members of the Maronite Christian community. However, this latest appointment was marked by a notable disagreement between President Joseph Aoun and Prime Minister Nawaf Salam, which surfaced just before the cabinet session.
Salam openly expressed his reservations following the meeting, stating: “I objected to the appointment of Karim Saeed as Central Bank governor. From now on, he must adhere to our government’s financial policies and commit to resolving the depositors’ crisis.”
The session concluded with Saeed’s official appointment, despite opposition from Prime Minister Nawaf Salam, his deputy Tarek Mitri, Culture Minister Ghassan Salamé, Education Minister Rima Karami, Social Affairs Minister Haneen Al-Sayed, Interior Minister Ahmed Al-Hajjar, and Economy Minister Amer Al-Bassat.
The prime minister also emphasized his administration’s focus on financial reforms, announcing that the cabinet had approved a draft law amending Lebanon’s banking secrecy legislation, a move he described as essential to ongoing reform efforts. Finance Minister Yassin Jaber, then, expressed his preference for a consensus-based approach rather than a vote on the appointment of Lebanon’s new Central Bank governor.
A necessary move
For economic experts in the country, the decision to appoint a new person for this role is necessary given the weight of responsibilities associated with the role. “A key position like this cannot remain vacant, especially in the midst of Lebanon’s ongoing economic and financial crisis,” economic expert Professor Jassem Ajaka told Al-Hurra news. Regardless of Saeed’s background, Ajaka argued that his appointment marked a positive step for both the government and the presidency.
Addressing concerns over the new governor’s authority, Ajaka pointed out that major financial reforms fall under the jurisdiction of the government and parliament, while the Central Bank governor’s primary role is to oversee the banking sector and manage monetary policy.
The challenges confronting the new Central Bank governor
Lebanon’s new Central Bank governor steps into office at a moment of deep financial turmoil, a banking sector in crisis, a collapsed currency, and a public that has lost faith in the system. One of his biggest challenges will be dealing with the estimated $72 billion in financial sector losses while figuring out how to handle depositors’ frozen funds, an issue that has fueled frustration and protests for years.
He is also expected to push forward long-delayed reforms required by the International Monetary Fund (IMF) to secure much-needed aid, but political deadlock has repeatedly stalled progress.
Beyond that, he faces the task of stabilizing inflation and restoring the credibility of the central bank, which has been tainted by years of mismanagement and corruption allegations.
In one of the significant challenges, Professor Jassem Ajaka outlined “Qard Al Hassan” a financial entity affiliated with Hezbollah that operates outside Lebanon’s conventional banking framework, in his interview with Al-Hurra news. Ajaka explained that its resolution is particularly complex due to its political implications whilst believing that the governor now faces a difficult choice, either to formally oppose the Hasan Loan or attempt to regularize it as a licensed financial institution subject to Lebanese banking regulations.
However, pursuing this would involve navigating complex financial and administrative details, as well as engaging with the Banking Control Commission, according to Ajaka.
On the monetary policy front, Ajaka pointed out that the most pressing challenge is the management of the exchange rate. Under the current Currency and Lending Law, setting the exchange rate is officially the purview of the parliament. Yet, because no updated law has been enacted since the 1960s, this responsibility has been temporarily transferred to the Minister of Finance.
Rodayna Raydan is a Lebanese-British journalist. You can follow her on Twitter @Rodayna_462
The views in this story reflect those of the author alone and do not necessarily reflect the beliefs of NOW.
