April 1, 1964 marked a turning point in Lebanon’s financial history, when responsibility for issuing currency and managing monetary policy formally passed to Banque du Liban. After years of preparation and reforms launched under President Fouad Chehab, Lebanon entered an era of full monetary sovereignty.

Before the central bank officially opened, logistical and administrative preparations were completed at its new headquarters in Hamra, built in record time. On March 30, 1964, President Chehab inspected the new building, which had been completed within budget and became a prominent symbol of the institutional state he sought to establish.

The following day brought an end to the decades-long role of Banque de Syrie et du Liban and began the era of a Lebanese lira issued exclusively by Banque du Liban. About 320 employees moved from the former issuing bank to the new institution, while Banque de Syrie et du Liban became an ordinary commercial bank.

One of that night’s most symbolic events was the transfer of the gold reserve from Banque de Syrie et du Liban’s vaults on Riad al-Solh Street to the new Banque du Liban vaults. The Lebanese Army and security forces supervised the sensitive, carefully planned operation.

During the first months, the new Lebanese lira was widely embraced by residents and expatriates, increasing currency in circulation by about 6 percent. At the same time, Banque du Liban bought foreign currencies on the market to build its reserves and reinforce the national currency’s stability.

Early success did not remove the challenges. As the banking sector expanded to 93 banks, financial imbalances appeared at several institutions. The new monetary authority soon faced crises involving the Real Estate Bank, the Commercial Bank and Sogex Bank, requiring rapid intervention to prevent contagion across the sector.

The authorities contained these crises using existing commercial laws: some troubled institutions were liquidated and others placed under legal protection. This was the first practical test of the state’s and Banque du Liban’s ability to manage financial crises.

The greatest challenge was still to come. In autumn 1966, Intra Bank—the largest banking institution in Lebanon and the Middle East at the time—fell into crisis. Founded by Youssef Beidas, the bank had built a financial empire spanning Lebanon and Arab, African and Western capitals, drawing heavily on Arab and especially Palestinian deposits.

Its rapid expansion, however, was tied to long-term investments and major projects that left too little liquidity. When confidence in financial markets faltered and depositors demanded their money, the bank could no longer meet the growing withdrawals.

Banque du Liban tried to intervene by providing emergency facilities and liquidity against bank guarantees, but the scale of the crisis exceeded both its resources and its legal authority. As financial solutions failed, the issue reached the highest political level, with President Charles Helou and the government trying to contain the consequences.

Only two years after its creation, Banque du Liban was confronting the largest banking crisis in modern Lebanese history. It was a decisive test of the central bank’s role, the limits of its intervention and the challenge of reconciling the banking freedom behind Lebanon’s financial prosperity with the supervision and stability demanded by repeated crises.

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