Lebanon’s financial sector has entered a new phase of uncertainty as key leadership posts at the central bank and its main oversight body remain vacant, following the expiration of the terms of top executives. The delay in appointing replacements is not due to a sudden emergency, but rather the result of political bickering over names and shares of influence; this might result in a deadlock that threatens to further erode domestic and international confidence in the country’s fragile financial institutions.

For the first time in years, the central council of Banque du Liban (BDL) and the Banking Control Commission are facing a complete vacuum. While day-to-day administrative tasks at BDL continue, the absence of decision-makers has effectively frozen critical functions of Lebanon’s monetary authority.

The terms of the four deputy governors of BDL and all members of the Banking Control Commission expired on June 9. They were appointed in June 2020 at the height of Lebanon’s financial collapse. With no immediate plans for replacement, the leadership void is expected to persist for days, if not weeks. Prime Minister Nawaf Salam is scheduled to travel to the United States between June 17 and 20 to attend an international conference, meaning a Cabinet session to approve new appointments is unlikely before his return.

The impact of this power vacuum could be far-reaching. In the current phase of Lebanon’s crisis, the central bank cannot rely solely on its governor. The absence of deputy governors and Banking Control Commission members hinders BDL’s ability to issue regulatory decisions, control liquidity, monitor banking operations, and implement reform measures.

More broadly, the paralysis undermines already-fragile trust in Lebanon’s monetary institutions both at home and abroad. The connection between international confidence and Lebanon’s ability to secure support from donors and financial institutions, especially the International Monetary Fund, is well-established.

Should the vacuum drag on, risks to Lebanon’s banking system will grow. Coordination with international stakeholders could suffer, and legislative progress, most notably the long-awaited “financial gap law” currently being drafted, could be delayed. 

The disruption of the Banking Control Commission is equally problematic. The now-expired commission was responsible for supervising banks, financial institutions, money changers, brokerage firms, and leasing companies. These sectors, critical to maintaining a minimum level of financial order, are currently operating without oversight at a time when Lebanon can least afford regulatory blind spots.

At the heart of the crisis is a deepening political standoff. The outgoing deputy governors, Wassim Mansouri, Bashir Yakzan, Salim Chahine, and Alexander Mouradian, are at the center of a tug-of-war among Lebanon’s main political players.

According to political sources cited by Al-Modon, President Joseph Aoun had pushed for a full overhaul of the deputy governors, in line with expectations from the international community, particularly the United States. Prime Minister Salam reportedly supported this direction, though he favored retaining Chahine, the second deputy governor.

But Parliament Speaker Nabih Berri intervened to block any full reshuffle, insisting on the replacement of Mansouri, the first deputy governor. Meanwhile, former Progressive Socialist Party leader Walid Jumblatt has demanded that the Druze deputy Yakzan be replaced by Makram Bou Nassar, an executive at the central bank.

The result has been a fragile compromise: a potential renewal for Mansouri and Chahine, the appointment of Bou Nassar in place of Yakzan, and a new Armenian figure to replace Mouradian. Any official appointment requires a Cabinet decree approved by both the finance minister and the central bank governor.

The central council of BDL, the body responsible for monetary policy decisions and regulatory circulars, is currently impaired. The council includes the four deputy governors, the directors general of the finance and economy ministries, and the government’s commissioner to BDL, a post that is also vacant.

On the Banking Control Commission front, there is a preliminary agreement to appoint Mazen Soueid as its new chairman. Soueid currently serves as head of the Investment Development Authority of Lebanon (IDAL). But last-minute surprises remain possible, as is often the case in Lebanon’s appointment process.

According to sources who spoke to Al-Modon, all current members of the Banking Control Commission are expected to be replaced. Outgoing members include Chairwoman Maya Debbagh, members Adel Drek and Kamel Wazne, Joseph Haddad representing the Association of Banks, and Marwan Mikhael representing the Deposit Insurance Corporation.