Bank Hold-Ups in Lebanon: A Crisis of Morality?

Rahaf Zaher

6 December 2022

Since November 2019, local banks in Lebanon have been imposing a Capital Control scheme, unratified by parliament, under the decree of the Central Bank. For a while, depositors were prohibited from withdrawing foreign currency deposited prior to that month, and a weekly limit was set on withdrawals in Lebanese Lira. Later on, while the official Lebanese Lira was still fixed at 1,507 to the dollar and the black market rate was escalating rapidly, reaching 40,000 to the dollar in 2022, depositors were allowed to withdraw limited amounts of their money at what came to be known as the ‘Lebanese Dollar’ (or ‘Lollar’) rate, first at 3,900LL starting in July 2020, and then at 8,000LL starting in December 2021.

Today, depositors are unable to withdraw large amounts of money in foreign currency, and when they withdraw small amounts, they lose almost fourfold of its value.

Taking Matters Into Their Own Hands

The informally imposed restrictions threatened people’s livelihoods as their savings were held hostage. When the situation worsened, and the government appeared to be either unable or unwilling to rectify it, depositors took matters into their own hands. In January of 2022, a depositor who was in debt stormed his bank, held employees hostage and demanded his money back. After an hours-long ordeal the bank granted him $50,000 from his savings. The incident was repeated in August of 2022 when an armed depositor held employees hostage in Beirut and demanded to withdraw his savings to pay for his father’s medical bills. Citizens took to the streets around the bank and stood in solidarity with the depositor. He left with $30,000.

Following this “successful” strategy of savings retrieval, the incident was replicated a dozen times all over the country, sometimes coordinated by the Association of Depositors in Lebanon. Those who spoke to the press announced that the main motivators for their actions were healthcare costs for loved ones or daily life expenses. People often gathered around the bank in support of the operation. Most armed depositors left after receiving a portion of their savings, ranging between $13,000 and $25,000. Some of them used fake or unloaded guns and delivered the money to their families before directly surrendering.

The Bank’s Moral Paradox

After a successful money retrieval, one armed depositor’s sister happily announced: “Now we can finally eat a cheese manouche!”, clearly manifesting how a once basic food staple is now rendered inaccessible. The threat on prior living standards brought by the Lira devaluation and loss of savings challenged peoples’ ethical boundaries.

Faced with resource scarcity, as well as expensive services and basic needs, people were forced into a state of moral ambivalence. The drastic situation in Lebanon gave some people an ultimatum between upholding their values and sustaining their livelihoods. Is it robbery when the

capital control scheme has no legal grounds? Is holding people hostage justified when your savings are held hostage? Is citizen mobilization to support such initiatives solidarity or encouraging violence?

Considering the rampant corruption of the banking system and governance in Lebanon, individual immoral acts become validated, creating a moral paradox: the overwhelming immorality of political actors expedited the ethical breakdown of individuals and consequently, of society. The system managed to rob people of their integrity as they were no longer able to uphold their moral values.

Beyond Bank Retrievals

As the situation is pushing more people to the brink, one thing that I observed in my research on livelihoods in Beirut is that there is now a widespread phenomenon of moral struggle and transformation that extends beyond the banking system. Citizens are becoming increasingly compelled to entertain thoughts or justify actions that they normally wouldn’t. Whard, a senior citizen I interviewed in Ras Beirut, is among them. She stated that “[The problem is] not only politics, [it’s also that] upbringing, ethics, and values are nonexistent anymore”. Yet, after getting her water motor stolen, she rhetorically asked me: “Do I steal another one to use instead of mine?”

In another story I encountered, a man - desperate to raise funds for basic essentials - consulted a lawyer acquaintance about the possible consequences of illegally cutting trees in the mountain in order to sell them as wood in the informal market and feed his family. The lawyer advised against it, and the man did not go ahead. What this story and the one before show, however, is that the severity of economic hardship is forcing people into a position where they have to contemplate moral compromise as a means of obtaining basic necessities. The bank incidents are sensational stories that we read about in the news, but the dilemmas they represent are now a regular feature of the economic crisis that we are facing in Lebanon.

Adopting the concept of “شو وقفت عليي؟” translating into “I’m not the only one causing trouble”, people view their immoral acts as insignificant in the grand scheme of systemic and government immorality. Others are blaming their fragile livelihoods on the fact that they still uphold their moral values and are questioning whether they need to resort to immoral acts to resolve their struggles. This raises the question: Can we expect the people of Lebanon to behave morally when those who govern have lost public trust, especially when it comes to upholding moral values?

Regardless of how we answer, there is no doubt that the collapse of the country’s economy, combined with the complete lack of trust in government and banks, is creating enormous pressures not just on people’s livelihoods but also on the values that they hold dear as ethical and moral subjects.

Rahaf Zaher is a Research Assistant at RELIEF Centre/ PROCOL Lebanon. Her research focuses on the relationship between livelihoods and politics in Ras Beirut where she conducted extensive fieldwork. Her latest work on the topic is titled Embodied Experiences, Troubled Livelihoods: Ethnographic Observations from Ras Beirut.