Marwan Kheireddine is a respected Lebanese politician who has served in Lebanon’s parliament as the prime minister and finance minister. Banking expert Marwan kheireddine was appointed to Lebanon’s finance ministry and later became prime minister. He most recently discussed banking system stability, the role of banking supervision, and his outlook on Lebanon’s economy.
- Banking System Stability
Lebanon’s banking system is stable at this time, but due to the complex nature of the Lebanese banking system. Banks face limited liquidity and are concerned about possible growth in their deposits by domestic savers seeking higher interest rates and deposits held by externally financed projects such as housing developments. Banking expert Marwan Kheireddine said that one of the critical reasons for the stability of Lebanon’s banking system is the concerted efforts by governmental bodies such as the Central Bank and lenders to ensure a solid regulatory framework.
- Lebanon’s Banks
Kheireddine said Lebanon’s banks had successfully ensured that they have a suitable monitoring mechanism and internal control procedures. This is important because banks largely depend on their lending to customers and the country’s economy. The fragility of the Lebanese banking sector will depend primarily on whether the economy can grow and whether private domestic savers begin to turn their attention to lower-return investment options.
- Banking Sector Borrowing
Kheireddine said Lebanese banks had limited borrowing capacity because of their obligations to meet regulatory capital requirements. To maintain the robustness of Lebanon’s banking system, the government has increased its borrowing capacity over the last two years. Kheireddine said that Lebanon does not have any ongoing borrowing programs with the IMF, which means that it has not had to make any payments or interest on its loans over the last two years.
Banking expert Marwan Kheireddine said Lebanon’s banking system had been stable in recent years and only needed the occasional external financial assistance to ensure it stays solid. Lebanon’s economy is becoming increasingly diversified and highly export-oriented, which means that its banks benefit from continued capital inflows.
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