February 22, 2009

Some Good News . . .

. . . for a change, I might add, coming from Lebanon.

Lebanon central bank chief got it right
Riad Toufic Salame bucked pressure in 2005 and kept Lebanese banks from investing in mortgage-backed securities. Now the sector is prospering amid the global downturn.

In 2005, he defied pressure from the Lebanese business community and bucked international trends to issue what now looks like a prophetic decree: a blanket order barring any bank in his country from investing in mortgage-backed securities, which contributed to the most dramatic collapse of financial institutions since the Great Depression. So as major banks in America and Europe were shuttered or partly nationalized and thousands of people in the U.S. financial sector were laid off, Lebanon's banks had one of their best years ever.
Billions in cash continue to pour in to the relative safety of Lebanese savings accounts, with comfy but not extravagant yields of 6%. A nation shunned for years as the quintessential failed state has become a pretty safe bet, or as safe a bet as investors are likely to find in this climate.

In a country known for windbag politicians prone to soaring oratory, Salame favors mundane technical facts as he describes the effort of growing Lebanon's banking sector from $7 billion in assets in the early 1990s to $91 billion today.

More here


Anonymous said...

Riad Toufic Salame was not the only one. Your own dad knew something was wrong, when real real estate prices went up and the neighbors took mortgages on their houses, then went skiing in their new SUV's. Any kid knows that sleeping and waiting for your house to gain value is not a good way to add value. Oh, and by the way, we went skiing last week in Zakopane, in my new 70.000 Euro VW 9-seater Transporter. Had a lot of fun, I'll send you some pics. Y.

Anonymous said...

En hoe staat het met de Carbon Footprint van die Transporter?

Anonymous said...

Carbon Footprint? Ja ehhh.... hij verbruikt een stuk meer dan die Saab. Ik ben er wel happy mee hoor.

Anonymous said...

I went skiing in my 4x4 jeep in Switzerland last winter. Altough i was send off - piste, since regulations prohibit downhill skiing in a car when it is too crowded, it went great!