The Lebanese banking sector’s relatively high level of success in recent years has garnered international attention. International business media outlets have praised Lebanon for being one of very few countries continuing to report growth since the financial crash of 2008. The high global regard of Lebanon’s financial sector also lies in its active cooperation with international institutions and implementation of anti-money laundering measures.
The Carnegie Middle East Center hosted a discussion with Lebanese banking sector representatives Khater Abi Habib, Saad Azhari, and Wassim Shahin to address the sector’s responses to various financial and regulatory challenges and its role within the Lebanese economy. Carnegie’s Paul Salem moderated the discussion.
The Lebanese banking sector proved largely immune from the 2008 financial meltdown that caused the collapse of many financial institutions around the world. This is because Lebanese banks have years of experience operating in an unstable and risky political environment, the panellists explained. As a result, Lebanese banks have long embraced conservative banking policies. For example, banks must have at least 30 percent of their assets in cash, said Shahin.
The participants emphasized that the Lebanese banking sector’s strong international openness also contributed to its success. They cited a number of examples, including:
Panellists responded to audience comments that conservative banking policies have maintained high interest rates, slowed job creation, and maintained a poor distribution of wealth in the country. They replied that interest rates have been coming down steadily and that the banks lend the equivalent of 100% of GDP to private sector enterprises of all sizes in order to stimulate growth and job creation. They averred that more could be done in general economic, fiscal, and monetary policy to spur growth and close the gap between rich and poor.
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