Coming up with the funds

The Lebanese financial sector has long been dominated by commercial banks, which have grown significantly in the post-war period. Indeed, customer deposits have increased threefold since 1995 to reach the $60 billion mark by the end of the first quarter of 2005. However, this phenomenal growth was more or less cancelled out by the banks and other financial institutions, struggling to allocate their deposit funding efficiently. They have scarcely invested their deposits into the domestic economy, opting instead to support the government’s financing plans by subscribing to government Treasury Bills and other types of fixed income securities. These have given high yields, but also contributed to killing off the domestic capital markets and the creation of alternative investment vehicles such as funds, that would allow investors to achieve substantially greater returns on their savings than they could individually. Funds are essential for any national economy as they can: * Achieve