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The Lollar Autopsy

Where a 2018 bank dollar entered the system, and why one exact dollar cannot be traced

As of

10 Aug 2026

Actors

Four

Since

1 Jan 2016

Sources

International Monetary Fund · World Bank · Associated Press

Plate for The Lollar Autopsy
Dates and figures in the plate are repeated as text below.

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A 2018 bank dollar did not sit in a labeled drawer. It became part of a pooled balance sheet. Banks placed foreign-currency funds at Banque du Liban, which paid unsustainably high rates, while the banking system financed the sovereign. As foreign-exchange holdings dwindled, balance sheets deteriorated. Recovery depends on loss recognition, bank reviews, repayment timing and who absorbs the gap.

The cast

DEPOSITOR

holding

Who
A person or company holding a pre-crisis US-dollar claim against a Lebanese commercial bank.
Wants
Access to the deposit and recovery as close as possible to its stated dollar value.
Holds
A legal claim against the bank, not a segregated pile of physical dollars.
Now
Many depositors remain unable to access their full balances. The final recovery value and timing remain unsettled.

Sources P2-S2P2-S4P2-S5

COMMERCIAL BANKS

diminished

Who
Deposit-taking institutions that pooled customer dollars and allocated them across assets and claims.
Wants
A restructuring that preserves viable institutions and determines how losses are allocated.
Holds
Loans, securities, claims on Banque du Liban and other assets, alongside liabilities owed to depositors.
Now
Their balance sheets deteriorated as Banque du Liban's foreign-exchange holdings dwindled. Asset-quality reviews are required by the recovery draft described by the World Bank.

Sources P2-S1P2-S2P2-S4

BANQUE DU LIBAN

diminished

Who
Lebanon's central bank and the recipient of large foreign-currency placements from commercial banks.
Wants
A restructuring that restores credibility, monetary stability and banking-system viability.
Holds
Central-bank assets and liabilities, claims on the state, regulatory authority and remaining foreign-exchange resources.
Now
Its balance sheet deteriorated as foreign-exchange holdings dwindled. The recovery draft calls for an asset-quality review of Banque du Liban.

Sources P2-S1P2-S4

LEBANESE STATE

holding

Who
The sovereign borrower, lawmaker and ultimate author of any recovery framework.
Wants
A recovery plan that restores deposit access and bank viability without making public debt even less sustainable.
Holds
Lawmaking and taxing authority, public assets and substantial sovereign obligations.
Now
Cabinet submitted the Financial Stabilization and Depositor Recovery draft to Parliament on December 26, 2025. Its final enactment status as of August 10, 2026 is VERIFY.

Sources P2-S2P2-S4P2-S5P2-S6

ONE DEPOSIT, SEVERAL BALANCE SHEETS

The arrows show documented system routes. They do not assign a verified percentage of one person's deposit to each destination.

DOCUMENTED SYSTEM ROUTE POSSIBLE USE OF POOLED FUNDS DRAFT, NOT LOCKED VERIFY
  1. 00

    CUSTOMER DEPOSITS USD IN 2018

    documented

    DEPOSITOR

    The commercial bank records a dollar-denominated liability owed to the customer.

    Amount
    $1.00 CLAIM RECORDED
  2. 01

    COMMERCIAL BANK POOLS THE FUNDS

    documented

    COMMERCIAL BANK

    The deposit is part of the bank's pooled balance sheet. It is not retained in a customer-specific drawer.

    Amount
    EXACT CUSTOMER-SPECIFIC ROUTE: VERIFY

  3. Parallel routes at step 2

    02

    LIQUIDITY AND PRIVATE-SECTOR ASSETS

    possible_route

    POSSIBLE BANK ROUTE

    Part of pooled funding could remain liquid or support private loans and other bank assets.

    Share of one deposit
    VERIFY
    02

    FOREIGN-CURRENCY PLACEMENTS AT BANQUE DU LIBAN

    documented

    DOCUMENTED SYSTEM ROUTE

    From 2016 onward, Banque du Liban paid unsustainably high interest rates on foreign-currency deposits from banks. Banks could then offer high foreign-currency rates to retail depositors.

    Share of one deposit
    VERIFY

    P2-S1

    02

    GOVERNMENT SECURITIES

    documented

    DOCUMENTED SYSTEM ROUTE

    Banks held government bonds, and Banque du Liban rules allowed qualifying government bonds to count toward bank reserves, enabling indirect monetary financing.

    Share of one deposit
    VERIFY

    P2-S1

  4. 03

    BANQUE DU LIBAN'S BALANCE SHEET

    documented

    BANQUE DU LIBAN

    Banque du Liban received bank foreign-currency deposits, paid high rates and conducted financial engineering. As its foreign-exchange holdings dwindled, both central-bank and commercial-bank balance sheets deteriorated.

    P2-S1

  5. 04

    FINANCING THE STATE

    documented

    LEBANESE STATE

    The legal framework allowed Banque du Liban to provide Treasury advances, longer-term loans in exceptional circumstances and purchases of government securities. Banks also financed the state through government paper.

    P2-S1

  6. 05

    THE BREAK

    documented

    2019 TO 2020

    The financial system collapsed in 2019. Lebanon stopped servicing most of its debt after the March 2020 sovereign default. Many depositors could no longer access their funds.

    P2-S4P2-S5

  7. 06

    THE CLAIM REMAINS, THE LIQUID DOLLAR DOES NOT

    documented

    LOLLAR

    The account can continue to display a nominal dollar balance while access, timing and economic recovery value remain restricted or uncertain.

    Recovery value
    VERIFY

    P2-S2P2-S4P2-S5

  8. 07

    RECOVERY FRAMEWORK

    draft

    DRAFT LAW

    The Cabinet approved and submitted the Financial Stabilization and Depositor Recovery draft to Parliament on December 26, 2025. The World Bank's April 2026 description says it proposed face-value repayments for eligible dollar deposits over 4 to 20 years and required asset-quality reviews of banks and Banque du Liban.

    Current legal status
    VERIFY

    P2-S2P2-S4P2-S5P2-S6

How the steps depend on each other

  • L0 L1 Creates a dollar liability owed by the bank
  • L1 L2A Possible allocation of pooled funds share: VERIFY
  • L1 L2B Foreign-currency placement at Banque du Liban share: VERIFY
  • L1 L2C Government-paper exposure share: VERIFY
  • L2B L3 Bank receives a claim on Banque du Liban
  • L2C L4 Direct bank financing of the sovereign
  • L3 L4 Treasury advances, loans and government-security purchases
  • L4 L5 Sovereign debt becomes unsustainable and most servicing stops after the March 2020 default
  • L3 L5 Foreign-exchange holdings dwindle and balance sheets deteriorate
  • L5 L6 Nominal account claim survives while access is restricted
  • L6 L7 Recovery depends on legislation, asset reviews and final loss allocation

ILLUSTRATIVE RANGES, CONTESTED

NO AGREED CENTS-ON-THE-DOLLAR FIGURE

Cents on the dollar

VERIFY

no established figure

Present-value recovery

VERIFY

no established figure

Nominal recovery

VERIFY

no established figure

Why no agreed figure exists

  1. The final size and allocation of banking-system losses are not locked.
  2. Asset-quality reviews of commercial banks and Banque du Liban are required.
  3. The value of any bonds, future central-bank revenues or other recovery instruments depends on terms that are not final.
  4. Repayment maturities can materially change economic value even where a draft uses the phrase face-value repayment.
  5. The IMF says the strategy must respect creditor hierarchy, available liquidity and public-debt sustainability.
  6. The final legal status of the FSDR framework as of August 10, 2026 could not be verified from a qualifying current source.

What the draft does establish

CABINET AND PARLIAMENT
Cabinet approved and submitted the FSDR draft to Parliament on December 26, 2025. P2-S4P2-S5
REPAYMENT PERIOD
The World Bank described proposed face-value repayments for eligible dollar deposits over 4 to 20 years, tiered by deposit size, with longer maturities for larger balances. P2-S4
ASSET REVIEWS
The draft requires asset-quality reviews for commercial banks and Banque du Liban. P2-S4
CREDITOR HIERARCHY
The IMF says depositors should not absorb losses before shareholders or junior creditors. P2-S2
LIQUIDITY CONSTRAINT
The IMF says deposit release must be consistent with the liquidity available in the system. P2-S2
STATE CONTRIBUTION
The IMF says any required state contribution must not undermine public-debt sustainability. P2-S2P2-S3

Chains of contradiction

  1. THE DOLLAR THAT WAS THERE AND WAS NOT THERE

    1. The depositor's statement recorded US dollars.
    2. The bank legally owed a dollar-denominated claim.
    3. The deposited funds were pooled and placed into other assets and claims.
    4. The account could continue to show dollars after the system no longer had enough accessible liquid dollars to honor all claims as stated.

    P2-S1P2-S5

  2. THE HIGH INTEREST THAT MADE THE DEPOSIT LESS SAFE

    1. Banque du Liban paid banks unsustainably high rates on foreign-currency deposits.
    2. Banks could offer high foreign-currency rates to retail depositors.
    3. The arrangement attracted and retained additional dollar claims.
    4. As Banque du Liban's foreign-exchange holdings dwindled, both bank and central-bank balance sheets deteriorated.

    P2-S1

  3. FACE VALUE WITHOUT A FINAL VALUE

    1. The draft described by the World Bank proposes face-value repayment for eligible dollar deposits.
    2. Repayment can extend over 4 to 20 years.
    3. Bank and central-bank asset-quality reviews are still required.
    4. Loss allocation, liquidity, instrument value and the current legal status are not fully settled.
    5. A face value written into a draft is therefore not yet a verified recovery percentage.

    P2-S2P2-S4P2-S6

Sources

  • P2-S1 International Monetary Fund Lebanon: Technical Assistance Report - Diagnostic Report Governance and Corruption 1 Jun 2026 official international institution link pending verification
    What this source establishes
    • Banque du Liban financial engineering
    • Unsustainably high rates on bank foreign-currency deposits
    • Deterioration of bank and central-bank balance sheets
    • Treasury advances and loans
    • Government-security purchases
    • Direct and indirect monetary financing
  • P2-S2 International Monetary Fund IMF Staff Concludes Visit to Lebanon 13 Feb 2026 official international institution link pending verification
    What this source establishes
    • FSDR described as a first step
    • Creditor hierarchy
    • No depositor losses before shareholders or junior creditors
    • Available-liquidity constraint
    • Public-debt sustainability constraint
  • P2-S3 International Monetary Fund IMF Staff Concludes Visit to Lebanon 25 Sept 2025 official international institution link pending verification
    What this source establishes
    • Need to recognize and allocate losses
    • Protection of small depositors
    • Restoration of bank viability
    • Public-debt sustainability
  • P2-S4 World Bank Lebanon Macro Poverty Outlook Apr 2026 official international institution link pending verification
    What this source establishes
    • December 26, 2025 submission of FSDR draft
    • Draft requires revisions
    • Proposed 4 to 20 year repayment period
    • Longer maturities for larger balances
    • Asset-quality reviews for banks and Banque du Liban
    • March 2020 sovereign default
    • Unsustainable public debt
  • P2-S5 Associated Press Lebanese Cabinet approves a draft law to return funds wiped out with the 2019 collapse of banks 26 Dec 2025 wire service link pending verification
    What this source establishes
    • Cabinet approval
    • Parliamentary approval still required at publication
    • Frozen bank accounts
    • Depositor access restrictions
    • Political dispute over responsibility for losses
  • P2-S6 International Monetary Fund Press Briefing Transcript 9 Jul 2026 official international institution link pending verification
    What this source establishes
    • Program discussions remained focused on banking-sector restructuring
    • Program discussions remained focused on the medium-term fiscal strategy
    • No confirmation in this source that the FSDR draft had become final law

Data range: 2016 to August 10, 2026, with a 2018 deposit as the worked example.

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