Lebanese banking sector takes stock of its priorities

The banking sector remained the backbone of the Lebanese economy in 2009. Bank assets are equivalent to 334 percent of gross domestic product and deposits are equivalent to 274 percent of GDP, among the highest such ratios in the world. The sector displayed its resilience to global financial shocks and domestic political instability, and proved it can finance the private sector while supporting the public sector’s needs at a time when governments around the world have been forced to bail out their banking systems. But, with the rapidly changing global and regional financial landscape, the sector is likely to face new challenges in 2010. A spotlight on risk management The credit crisis has revealed glaring gaps in risk management, as banks around the world learn that underestimating liquidity creates severe systemic risk. Commercial banks in Lebanon have a fiduciary responsibility to conserve capital, safeguard deposits and minimize depositors’ risk. In