Lebanon’s financial meltdown has widely been blamed on the banking sector, and the former central bank governor remains in jail [Joseph Eid/AFP via Getty]
The US is weighing in with Lebanon’s government on the selection of the country’s next central bank governor in a bid to curtail corruption and illicit financing for the armed group Hezbollah through Lebanon’s banking system, five sources familiar with the issue said.
Washington’s feedback on the candidates for the top role in shaping Lebanon’s monetary policy is the latest example of the US’ unusually hands-on approach to the Middle Eastern country, where a more than five-year financial crisis has collapsed the economy.
It also demonstrates the US’ continued focus on weakening Hezbollah, the Iran-backed group whose sway over the Lebanese government has been reduced after the group was pummelled by Israel in last year’s war.
Since then, Lebanon has elected US-backed Joseph Aoun as president, and a new cabinet without a direct role for Hezbollah has taken power. That government must now fill vacant posts – including at the central bank, run by an interim governor since July 2023.
The US is reviewing the profiles of a handful of candidates for the role, according to three Lebanese sources briefed on the issue, one Western diplomat and an official from US President Donald Trump’s administration.
The sources spoke to Reuters on condition of anonymity to discuss Washington’s role in the selection process, the details of which have not been previously reported.
US officials met with some potential candidates in Washington and at the US embassy in Lebanon, two of the Lebanese sources and the Trump administration official said.
The Lebanese sources, who were briefed on the meetings, said the US officials asked candidates questions, including how they would fight “terrorist financing” through Lebanon’s banking system and if they were willing to confront Hezbollah.
The State Department, White House and the office of Lebanon’s prime minister did not immediately respond to requests for comment. A spokesperson for the Lebanese presidency declined to comment on the US role, saying the most important thing was to pick a qualified person.
The Trump administration official said the meetings were part of “normal diplomacy” – but said the US was making its guidance on candidates’ qualifications clear to the Lebanese government.
“The guidelines are, no Hezbollah and nobody who has been caught up in corruption. This is essential from an economic perspective,” the official told Reuters.
“You need somebody who is going to implement reform, demand reform, and refuse to look the other way whenever people try to do business as usual in Lebanon,” the official said.
Major role in reform
The Lebanese sources said some of the candidates being considered included former minister Camille Abousleiman, Firas Abi-Nassif, head of an investment firm, Jihad Azour of the International Monetary Fund and Philippe Jabre and Karim Souaid, both heads of their own asset management firms.
The next governor will play a major part in any economic and financial reforms, which Aoun and Prime Minister Nawaf Salam have pledged to prioritise to help Lebanon emerge from a devastating financial meltdown that began in 2019.
Triggered by widespread corruption and profligate spending by the governing political elite, the economic crisis impoverished most Lebanese, demolished the Lebanese pound and brought the banking system to a standstill.
Lebanon’s new government is looking to resume talks with the IMF for a financing programme, but the reforms remain a prerequisite.
Western and Arab countries have also set reforms as a condition to provide any reconstruction support to Lebanon, large swathes of which were left in ruins by Israel’s military campaign last year.
In that vein, US officials were discussing the candidates for central bank governor with Saudi Arabia, according to the Western diplomat and the Trump administration official.
The Saudi government’s media office did not immediately respond to a request for comment.
The incoming governor would replace interim chief Wassim Mansouri, who has been overseeing the bank since the 30-year tenure of longtime head Riad Salameh ended in disgrace in 2023.
Through most of his time as central bank chief, Salameh was feted as a financial wizard and enjoyed the backing of the US, which has a keen interest in the position because it oversees Lebanon’s broader banking system and helps keep it compliant with US laws preventing the financing of groups designated as “terrorist” factions, including Hezbollah.
But Lebanon’s financial collapse tainted Salameh’s legacy.
Days after after he left office in 2023, Salameh was sanctioned by the United States, Britain and Canada, which accused him of corrupt actions to enrich himself and his associates, and is facing charges of financial crimes in Lebanon and broad. He was arrested in September last year and remains in jail.
Last year, Lebanon was placed on a financial watchdog’s “grey list” after failing to address concerns about terrorism financing and money laundering through its financial system.
(Reuters Exclusive)
