Lebanon’s central bank meltdown is a cautionary tale of financial engineering running amok

Patrick Honohan 

The recent announcement by US, British, and Canadian authorities freezing the assets of retiring Lebanese central bank governor Riad Salameh marked an ignominious end to an extraordinary episode in central banking. Salameh is already under investigation in several European countries, and arrest warrants have been issued.

While recent commentary has focused on accusations that Salameh may have embezzled over $300 million from the central bank (Banque du Liban), the wider story is of the remarkable financial engineering transactions in which that central bank had been engaged for several years, and which provided a cover behind which embezzlement could be concealed.

Πηγή: www.piie.com

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