Lebanon Immune to Economic Crisis
The Lebanese economy is booming in light of the global economic crisis, reports BBC News. Lebanon, a country known for its political turmoil and wars, appears to be thriving in the new economic climate. Banks have been reporting record deposit numbers and their vaults are full of cash.
According the a Lebanese banking official, this is because Lebanon started to prepare itself for a economic meltdown back in September. ”I saw the crisis coming and I told the commercial banks in 2007 to get out of all international investments related to the international markets”, says Riad Salameh, the governor of Lebanon’s Central Bank.
This success can also be attributed to the Lebanon’s conservative banking system. Banks do not take on too much debt and are required to keep up to 30 % of their assets in cash. They are not allowed to partake in risky bundled debt packages either and weak banks must merge with stronger banks before they get into any fiscal trouble. “You could have thought they had a crystal ball. It was very wise of the Lebanese regulators not to get involved in all these risky international investments that turned out to be the doom of many banking systems,” says Edward Gardner of the International Monetary Fund. Sounds like the rest of the world, including the United States, could take a lesson from Lebanon’s banking system!
Venus Vahedi
