Since the Israeli assault in the summer of 2006 we have known that the next war on Lebanon would likely be one of economics, not arms, and that the targets would not be bridges and bunkers, but the pillars upon which all commerce in the country depends — the banks.
In response to this new reality, how has the banking industry responded? Has the Association of Banks in Lebanon (ABL) formed a standing committee or task force to confront threats as they arise? Has the ABL made efforts to organize an effective lobby in Washington to push its interests at the heart of where, unquestionably, the greatest threat of sanctions lies? The answer to both is a resounding ‘No’.
At best, the banks have adapted ad hoc to circumstances that have arrived — case in point is the ABL’s last-minute deal to fund Lebanon’s $32 million obligation to the United Nations Special Tribunal investigating the assassination of former Prime Minister Rafiq Hariri, which allowed the country to dodge possible retaliation at the UN Security Council. The banks’ move had two other important consequences: it immerses them in the country’s political morass — which invariably comes with its own risks — while at the same time illuminating how crucial they are in preserving the country’s security.
Instead of their reactive tendency, however, is it not of immense importance to adopt a unified, pro-active approach in identifying the foreseeable dangers ahead of time and taking steps to mitigate the menace before it reaches crisis levels?
When the United States Department of the Treasury labeled Lebanese Canadian Bank (LCB) a money laundering threat earlier last year — effectively cutting LCB off from US dollar transactions in the international finance system and forcing its sale to Société Générale de Banque au Liban — fear coursed through Lebanon’s banking boardrooms about how exposed each institution was to being targeted next. Now 11 months on, it is far from clear that Lebanese banks have adopted any meaningful, collective strategy to build a firewall protecting them from the next disaster. And with Western countries tightening sanctions on Syria, Lebanon is falling ever more under the international magnifying glass for being a possible route for the regime in Damascus to circumvent the censure.
The banks failing to adopt a new approach would be an obscene negligence for which we would all end up paying.
