Banks in Lebanon Will Open Tomorrow; Now What?

Lebanon's banks will finally open for the first time in nearly two weeks on Friday, following an unprecedented wave of protests across the country. Here are my summarized thoughts:

a- The decision to close down was impulsive, exaggerated and created unnecessary sense of fear among the population. Add to this another critical policy mistake that provoked unnecessary panic: decree that moving big foreign currency cash out of the country is now prohibited and controlled. But when was the last time the Lebanese government/institutions conducted a good policy?

b- For months, citizens and businesses have been facing withdrawal and transfer limitations and are unable to access foreign currency. (Try to cash out your balance if you are neither big depositor nor the product of nepotism; and let me know how that goes.) Which brings me to my next point.

c- Central Bank Governor Riad Salameh [don't let me start on his CNN statement again] and various banking sources have all said no capital controls—measures for managing the risks associated with capital flows—will be implemented by banks. This means there is no capital controls officially imposed in Lebanon yet, but that is another bad policy. Why?

d- From the examples of measures I listed in points a- and b- it is clear that some kind of control on capital movement is already in place, but it is neither uniformly applied across bank accounts nor depositors are being treated equally.

e- Banks instead are left to make their own internal restrictions. This is awfully wrong as banks can (and will) grant preferential treatment to their prime customers (i.e.; politicians and their rich friends) to get away with their money, at this critical moment, of which big parts are effectively generated through artificially high interest given to big depositors over the years. 

f- If my assumption is true, without capital controls in the event of a bank-run—which is very unlikely to happen tomorrow—who would bear the consequences in your opinion? I don’t trust the kleptocrats and the country’s elites would take equitable actions. They can barely understand what is going on.

Note: The author, as a depositor, has no skin in the game. He is merely, on one hand, passionate about waking policymakers up (in some case, literally) and, on the other hand, he likes to believe he has the people's interest at heart.