Riad Salameh: Lebanon holds out against the storm
Far from being caught up in the financial crisis of the past 18 months, Lebanon’s banking system and credit markets have emerged from the crisis stronger than before. Euromoney asked Riad Salameh, the central bank governor about his country’s apparent immunity to the credit crunch.
All structured products had to be approved by the central bank, and we also limited the banks’ appetite for investing in them. We ruled that no more than 5% of a commercial bank’s equity could be invested in structured products. Moreover, since August 2004 we have forbidden banks from making sub-prime investments, both domestically and overseas. We also added a liquidity requirement, which stipulated that 30% of a bank’s deposits had to be kept in absolute liquidity and could not be used for lending.