The reason behind this year’s success in banking and the mood of Lebanese bankers can be summed up in one word: confidence. “If depositors lose confidence in their bank, they will lose confidence in all the banks in the country,” said Chairman of the Banking Control Commission Walid Alamuddin in a speech to the Union of Arab Banks at their yearly conference in Beirut in November. Not only have depositors shown up in record numbers this year, but due to a seemingly irresistible interest rate spread, they have also converted their deposits into local currency at unprecedented rates — creating a challenge for bankers used to a highly dollarized balance sheet. Overall deposits into Lebanese banks increased 21 percent in the first nine months of 2009 compared to the same period of 2008, totaling $92.2 billion, according to the Association of Banks in Lebanon (ABL). Lebanese lira (LL) deposits saw
