BEIRUT: Lebanon’s primary objective for 2011 is how to preserve a high growth rate in its economy. As we know, real growth generates more purchase power, employment opportunities, and shrinks the debt-to-GDP ratio. Equally important is the issue of preserving the interest levels at the market’s consent. 

To achieve this goal, Lebanon needs to continue to attract new capital into its banking sector and thus allow banks to pursue their policy of lending to both the public and private sector and at the prevailing low interest rates.

Our country has been enjoying an unusual period of domestic calm, despite the absence of a government, which we hope will emerge soon.

Over the last two decades there has been a debate over whether financial openness also contributes to financial development and growth. Most of the empirical literature suggests that financial openness can contribute to financial depth and financial efficiency.

Lebanon’s economy has been sheltered from the global financial crisis and even prospered from it. Depositors, be they in the Gulf or elsewhere, transferred large amounts of money to Lebanese banks, which are still reputed for being a safe haven.

The Lebanese Canadian Bank incident in no way influenced the sound performance of our banking sector, and all the rumors that the issue entailed are unfounded; these rumors were also denied by the United States as well. The LCB story is way behind us and the rights of each depositor have been safeguarded.

The actual turbulence striking some Arab countries and the fall-out of the on-going global financial crisis spurs us to be more vigilant in assuming our responsibilities toward our markets and banks.

The stand-off in the Arab scene and the bloody situation in the Ivory Coast will undoubtedly affect the life and businesses of the Lebanese diaspora and the awaited transfers to the homeland.

Banque du Liban remains keen on overseeing the sound implementation of its circulars by the commercial banks to shield the sector from the challenges which could impede its drive toward parity with international banking standards.

We will pursue our incentives to banks to provide low interest loans to help small- and medium-sized businesses expand.

Banque du Liban will rely more and more on real time, on enhancing the efficiency to better serve the economy.

The Central Bank’s rules are meant to protect banks from any financial crisis, as they have already proven. 

The international financial crisis has led academics and practitioners to question some of the most basic foundations of finance theory, such as the hypothesis of market efficiency and rational behavior or the optimal approach to financial development. 

In any case, Lebanon is deemed active when it comes to banking culture, we believe that facilitating the founding principles of banking will encourage our banks to export themselves without hurdles and in conformity with financial regulations. Our presence overseas will have a positive impact for further mergers in the various financial markets. This will also boost cross-border investments and trade. 

Lebanon holds tremendous potential. Its banking sector is healthy and resilient. Its banks’ performance is highly professional. It prides itself in its available liquidity. It has flexible rules and voted legislations. It boasts about its skilful and competitive human factor. Its diaspora weighs in on the international scene. 

If you happen to be searching for a base to launch your business, one open and free market is there – Lebanon.

Riad Toufic Salameh is the governor of Banque du Liban, Lebanon’s central bank.