Middle East: Constantly tested, Lebanese banks remain resilient
Shaken by war on its border, a political crisis that has left it without an elected president for two years, and a collapse in the price of oil, Lebanon’s economy is facing challenges unseen since the country’s own civil war.
Governor Riad Salamé says the central bank has been working hard to avoid
Riad Salamé, Lebanon’s central bank governor since 1993, has grown used to working in difficult conditions. So his pronouncements on the state of the Lebanese economy and its banking sector can be darker than one might expect from a central banker. “You know, in Lebanon, you can say that there was no year that was not hard,” he tells Euromoney, deadpan.
Some years may be said to be harder than others, however. Lebanese banks have been dealing with a dramatic slowdown in the country’s economic growth, and a political crisis that has left the country leaderless – both largely the result of the civil war that has engulfed neighbouring Syria since 2011. And in recent months, the situation on the ground has become even more fraught.
In the spring, Lebanese banks started putting into practice a new US law to curb Hezbollah’s access to the financial sector, the Hezbollah International Financing Prevention Act, or HIFPA. (The US views Lebanese Shiite group Hezbollah, which is funded by Iran, as a terrorist organisation.)