Regulatory Alerts1998-03-25 | 6939Capital Adequacy Regulatory Framework for Banks Operating in Lebanon
The Central Bank of Lebanon issued Circular No. 44 to establish the comprehensive capital adequacy regulatory framework for domestic and foreign banks operating in Lebanon, mandating strict eligibility criteria for Common Equity Tier 1, Additional Tier 1, and Tier 2 capital instruments. The regulation enforces minimum capital ratios of 7%, 10%, and 12% respectively, requires a 2.5% capital conservation buffer, and temporarily permits exceptional add-backs for expected credit loss provisions and foreign exchange losses to support bank stability through 2026. Additionally, it imposes dividend distribution bans, mandates comprehensive recovery plans, and outlines specific valuation methodologies and exchange rates for recognizing real estate revaluation gains within regulatory capital.