The Lebanese banking sector has always had an exceptionaldegree of resilience given Lebanon’s checkered politicalhistory. The current political crisis and economic malaiseis no exception, with Lebanese banks reporting stronggrowth, launching new products, and diversifying throughexpanding into new markets. But challenges do lie ahead for the sector. The situation isaffecting banks’ overall strategies – driving externalgrowth in particular – and with the implementation of theBasel II Framework only six months off, the requirements arelikely to act as a catalyst for further consolidation of thecountry’s heavily banked sector. “The major problem we banks face stems from the differencebetween risk and uncertainty. Risk is something measurable –there are tons of models to manage risk – but uncertainty issomething not measurable. By its very nature, its parametersare flimsy,” said Shadi Karam, Chairman of BLC. “The situation is creating a huge question mark onfunctional decision making in institutions. If you havequestions about tactical moves, it
