Factors and Conditions Affecting Banks in Lebanon: Crisis of 2019

Proceedings of The 5th International Conference on Business, Management and Economics

Year: 2021

DOI:

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Factors and Conditions Affecting Banks in Lebanon: Crisis of 2019

Samar Faouaz Abou Ltaif

ABSTRACT: 

Lebanon is now facing a deep financial crisis, and commercial banks face the worse liquidity stress in the country’s history. Researches done till now do not correlate other factors to each other and to the crisis. Those factors are mainly: banking activities and decisions, compliance, political issues, economic factors, as well as crisis and “black swans”. In this paper we will analyze the factors that paved the way to the current situation, provide recommendation and suggest future research. This exploratory paper is based on a literature review of research papers, government reports, banks reports, newspapers, as well as information collected through observation during occurrence of the events. Results show that the huge capital inflows that entered the banking sectors for several years were funding the “financial engineering” instead of stimulating economic development. As Macro-economic and financial factors may combine supporting economic development and so the Sustainable Development Goals (SDGs) set by the United Nations for a better and safer future for society, the significance of this study is that, by defining and analyzing the fragility factors will assist to develop an effective and efficient early banking crisis warning system and developing a financial innovation framework which contributes to societies’ well-being.

Keywords: compliance, economic factors, financial-engineering, liquidity, monetary policies.