A report by the Central Bank has revealed that Lebanese banks attracted the largest share in bank deposits in the Middle East in 2010…over 30 percent of total deposits.
Lebanese banks reportedly attracted $8 billion of the total $25 billion which was deposited in banks across the region… this resulted in increasing the total bank capital to $105 billion as of October of this year.
This massive cash flow has enabled banks to increase lending to private and public sector at very reasonable rates, according to the report
There is some concern that the tension over the issue of the indictment by the Special Tribunal for Lebanon over the assassination of Lebanon’s former PM Rafik Hariiri could slow down the inflow of deposits ,but observers point out that Lebanese banks have survived worse situations in the past.
In any case banks are not taking any chances for this reason they have been pushing for the renewal of the term of Central Bank Governor Riad Salameh for another six years.
Salameh, who was named as the best Central Bank governor by the prestigious Euromoney magazine in 1996, is credited with stabilizing the Lebanese pound, reducing inflation, boosting foreign currency reserves and passing many important directives that allowed the Central Bank to weather all financial crises.