Vulnerable

T he rating agency just won’t quit. Two months ago Standard & Poor’s (S&P) threatened that if the government didn’t do something about fiscal problems running wild, Lebanon would be downgraded later this year. S&P’s latest incoming targeted the country’s most cherished sectorthe banks. Rest assured: The recent warning did not highlight problems within the banks. Whether or not the government heeds S&P’s earlier signal will determine to a great extent the problems that banks may face. The agency went after financial systems around the world that are vulnerable or already tasting deterioration of credit quality. If, by chance, defaulting on loan payments reaches critical mass, banks could experience a credit bust. Out of 15 banking systems cited by S&P, US banks’ credit exposure could be hit if the booming economy comes to an end with a hard landing. Japanese banks cannot prosper as the country’s recovery from its financial