In July, I authored a report for FFA Private Bank titled “The Lebanese banking sector 2008,” which examined the Lebanese banks’ fundamentals, performance, financial strength and the challenges the sector faces going forward. The report pinpoints that the Lebanese banking sector has steadily grown over the years relative to the size of the domestic economy, having amassed assets in excess of 327 percent of Lebanon’s gross domestic product amidst ongoing deposit inflows. The increase was driven by several comparative advantages, including a banking secrecy law, a skilled workforce, a relatively stable currency and high yields on local and foreign currency compared to peer countries. The strict regulatory framework and conservative policies set by the central bank that shielded Lebanese banks from exposure to toxic assets and structured products also helped considerably. Over the past decade, the Lebanese banking landscape has changed significantly, moving from a highly competitive and fragmented environment
