Switzerland says it is investigating Lebanese central bank


The Swiss federal prosecutor’s office has opened an investigation into “aggravated money laundering” and “possible embezzlement” from the crisis-hit Lebanese central bank.

The Swiss investigation comes amid increased scrutiny of longstanding central bank governor Riad Salamé once lauded for his financial acumen and now under fire for his management of the bank as Lebanon suffers its most painful economic crisis in three decades.

In response to reports by news organisations including Reuters that the Swiss probe related to overseas transfers made by the governor or his close associates, Mr Salamé said in a Banque du Liban statement that allegations that money had been moved abroad, “whether in his name, his brother’s name or his assistant’s name” were “fake news”.

Mr Salamé was once credited with steadying the country’s finances, chiefly through the local currency’s peg to the dollar, which kept down the cost of imports. But the black market rate collapsed after Lebanon defaulted on its debt in 2019, triggering the current crisis. Prices have risen dramatically, unemployment has soared and living standards have plunged.

For more than a year, depositors have been unable to withdraw dollars they had saved in Lebanese banks, while their Lebanese pound savings have lost about 80 per cent of their value. Ad hoc banking restrictions have prevented most people from making foreign transfers, although many ordinary Lebanese suspect that some people with political connections have squirrelled billions out of the country.

Swiss authorities declined to confirm whether Mr Salamé, first appointed governor in 1993 and seen as one of Lebanon’s most powerful men, was a subject of investigation specifically.

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An official in the Lebanese prime minister’s office, who did not want their name to be published, said: “The prime minister and the president were made aware of [the Swiss investigation] yesterday by the justice minister.” Acting prime minister Hassan Diab, who resigned following the Beirut port explosion in August has year, has previously called for Mr Salamé’s resignation.

Riad Salamé at a conference in Paris, France, in April 2018
Swiss authorities declined to confirm whether Riad Salamé was a subject of investigation specifically © Abd Rabbo Ammar/ABACA/Reuters

Switzerland has asked for Lebanon’s co-operation in the investigation. Marie-Claude Najm, the Lebanese justice minister, confirmed having “received a request for judicial assistance from the Swiss judicial authorities”, adding that she “handed it over to the attorney-general, in accordance with the law”. Ms Najm declined to comment further.

With around half of its population falling into poverty, according to UN estimates, Lebanon is in desperate need of financial assistance. But potential donors, including France, have said they want to see a forensic audit into the BdL’s books first. This audit has been mired in controversy, and auditors Alvarez & Marsal withdrew late last year. The Lebanese government itself estimates that the BdL is sitting on tens of billions of dollars worth of losses. Mr Salamé has repeatedly warned that Lebanon is nearing the limit of its foreign currency reserves, used to subsidise imports of fuel, medicine and essential foods.



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