The State’s authority and the country’s ability to face the crisis

The media has recently been probing into inflated figures included in the monthly balance sheet of the Central Bank (BDL) for the end of February 2019. The media outlets are entitled to reflect on this matter, but it turned out that these figures were the result of an incorrect accounting entry. The error was corrected in the subsequent balance sheet for March 15. The media hype was exacerbated by the fact that the corrected numbers reached as high as $21.6 billion.

TOO MUCH ADO ABOUT AN ERROR

The error that inflated the numbers by $21.6 billion was reflected on both sides of the consolidated balance sheet of the banks operating in Lebanon. Since the Central Bank carried out the correction by reducing the balance of the banks’ deposit account with BDL, the same must be done at the level of the consolidated balance sheet of the banks on the same date and for the same amount. Such corrections have to be sanctioned by a circular issued by BDL’s Central Council. In fact, these figures are neither deposits nor loans. They are merely accounting entries that match. On the assets side of the banks’ balance sheet, they represent financial assets resulting from the financial engineering transactions carried out with BDL. The same accounts resulting from the financial