On March 27, 2025, Lebanon’s cabinet appointed Karim Soueid as the new governor of the Central Bank, ending a critical vacancy that had persisted since July 31, 2023. However, the decision was far from routine. The appointment exposed deep political tensions, with President Joseph Aoun aggressively advocating for Soueid's candidacy against Prime Minister Nawaf Salam's insistence on considering alternative nominees—a disagreement that escalated to threats of resignation from the Prime Minister himself. Ultimately, Salam's objections were overridden, and Soueid was hastily invited to present his financial plan before the cabinet, ostensibly to legitimize a contentious selection process. The cabinet subsequently voted decisively in Soueid’s favor, 17 to 7, underscoring the entrenched influence of Lebanon’s political and financial elite. This decision that not only reflects troubling political maneuvering but likely marks the death knell for Lebanon’s promised structural reforms. It lays bare the entrenched power of Lebanon's banking elite and their political allies, dramatically undermining the hope for genuine economic recovery.

The swift yet irregular manner of this appointment, combined with Soueid’s controversial candidacy, poses substantial risks to the credibility of President Aoun’s administration and effectively signal the demise of Lebanon’s long-promised structural reforms. Four critical issues emerge from this appointment, each highlighting a troubling abandonment of transparency, accountability, and commitment to genuine economic recovery.

A Flawed Selection Process and Political Obstruction

Karim Soueid’s appointment as governor of Lebanon’s Central Bank directly contradicts the fundamental principles that the new government committed itself to uphold. Upon taking office, the administration explicitly endorsed a transparent, merit-based framework—initially developed by the Office of the Minister of State for Administrative Reform (OMSAR)—to ensure fair, objective, and merit-driven appointments for senior administrative positions. This framework aimed to tackle longstanding issues of sectarian patronage, political and economic favoritism, and bureaucratic inefficiencies that have severely weakened Lebanon’s governance.

Yet, when it came to appointing the Central Bank governor, the government notably deviated from these commitments. Although the Minister of Finance, Yasine Jaber, submitted three names to the cabinet for the post, it was clearly rigged in favor of Karim Soueid as the other two candidates were not seen as serious contenders. Moreover, none of the names proposed had prior screening to understand their programs and positions on critical issues concerning financial reforms, namely on the distribution of losses. Karim Soueid was the only candidate who was invited to the cabinet on the day of the appointment, not for the interview but in an attempt to convince the prime minister to sway his decision.

The cabinet’s vote—17 in favor, 7 against—demonstrates once again that Lebanon’s major political parties, though spanning a broad ideological spectrum, consistently coalesce when it comes to resisting reforms. Amal, Hezbollah, Lebanese Forces, Kataeb, the Progressive Socialist Party, and the president’s own bloc all aligned behind Soueid, highlighting a recurring pattern where diverse political factions unite specifically to preserve their shared interests. This unity is not coincidental: since Lebanon’s economic crisis began in 2020, these same parties have consistently and jointly blocked critical reforms. Together, they undermined the Lazard recovery plan via parliamentary procedures, obstructed essential measures including capital control legislation, banking sector restructuring, amendments to bank secrecy laws, and repeatedly stalled negotiations with the IMF. Their joint support for Soueid’s appointment, therefore, logically reaffirms their collective determination to maintain the status quo and resist meaningful economic change.

The Banking Lobby’s Influence

Behind Karim Soueid’s appointment stands Lebanon’s influential banking lobby, which played a pivotal role in securing his position and obstructing reforms that threaten their financial interests. This lobby has strategically placed pro-bank advisers within influential political circles, particularly around President Aoun, ensuring direct influence over critical appointments and economic policy decisions. Notably, one of the president’s close advisers who strongly supported Soueid’s nomination also serves on the board of Soueid’s company—demonstrating the extent of this intertwined relationship.

In addition to direct political influence, the banking lobby has actively funded media campaigns designed to undermine and discredit reform-oriented political leaders, particularly targeting Prime Minister Nawaf Salam’s efforts to establish a reform-driven cabinet. Their tactics have extended further, including lawsuits and legal pressure against civil society organizations, independent media outlets, and research institutions advocating for financial reforms and exposing the complicity of the banking sector in causing and prolonging the crises.

Implications for Financial Reforms and the Central Bank’s Role

The appointment of Karim Soueid as governor of Lebanon’s Central Bank casts significant doubt on the government’s ability—and willingness—to enact urgently needed financial reforms. Lebanon currently stands at a critical crossroads, with economic recovery heavily dependent on implementing structural reforms outlined by the International Monetary Fund (IMF). Central to the IMF’s framework are clear principles: fiscal responsibility, transparency in governance, equitable sharing of financial losses, and comprehensive restructuring of the banking sector. The Central Bank governor occupies a pivotal role in this process, entrusted with steering monetary policy, supervising banking regulation, managing foreign exchange, and representing Lebanon in sensitive international financial negotiations.

In light of these crucial responsibilities, Soueid’s stated policy approach raises serious concerns. His proposals appear tailored explicitly to shield banks and their powerful stakeholders from accountability, shifting the substantial burden of accumulated financial losses onto depositors and the broader public. More alarmingly, his strategy involves the liquidation or leveraging of critical state resources—including Lebanon’s gold reserves—to cushion banks from necessary restructuring. Such a course of action not only contradicts principles of fairness and equity but is fundamentally at odds with the reform conditions set by the IMF, potentially paralyzing these efforts and maintaining a destructive status quo that benefits only a narrow segment of financial elites at immense cost to ordinary citizens.

President Aoun’s Reform Legacy in Question

Less than two months into his presidency, President Aoun’s commitment to reform has effectively collapsed. Karim Soueid’s appointment, rather than signifying presidential strength, illustrates Aoun’s inability—or perhaps unwillingness—to confront entrenched financial interests.

One might mistakenly interpret President Aoun’s insistence on Soueid’s appointment as a demonstration of presidential strength, with the Maronite president successfully imposing his preferred candidate upon a Sunni prime minister. However, the reality is starkly different: President Aoun has effectively surrendered to the banking lobby’s demands. In doing so, he has sealed the fate of genuine reform, reinforcing Lebanon’s structural crisis and   disproportionately burdening ordinary people across all confessional groups.