S&P: Lebanon’s bank restructuring to cost up to $102 billion
2021-05-13
BEIRUT: Standard & Poor’s estimated that the cost of restructuring Lebanon's banking system could range from $23 billion to $102 billion, depending on which scenario is pursued.

“Our scenarios suggest that the cost of restructuring Lebanon's banking system could range from $23 billion (using the official exchange rate) under Scenario 1 to $102 billion under Scenario 3,” S&P Global Ratings said in its latest report.

S&P based these scenarios partly on its observations of 17 emerging-market sovereign defaults between 1999 and 2010, where the average haircut on government debt stood at 42 percent.

Scenario 1: 50 percent haircut on banks' holdings of Lebanese government foreign and local currency debt, a 10 percent write-down of BdL placements, and 5 percent losses on private-sector lending. 

Source : dailystar
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