Lebanon: Financial System Stability Assessment

IMF Staff Country Reports, January 24, 2017

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This paper discusses findings of the assessment of Lebanon’s financial system.
Lebanon has maintained financial stability for the last quarter century during repeated shocks and challenges.
Over time, macroeconomic and financial vulnerabilities have accumulated.
Although central bank policies have helped to maintain confidence, fiscal adjustment is needed to reduce risks to financial stability.
The banking system has thus far proven resilient to domestic shocks and regional turmoil, but the materialization of severe shocks could expose vulnerabilities.
Significant progress has been made to further strengthen Lebanon’s financial integrity framework, with some scope for improvement remaining.

Lebanon has maintained financial stability for the last quarter century during repeated shocks and challenges.
Macroeconomic and financial vulnerabilities have accumulated over time.
Central bank policies have helped to maintain confidence.
Fiscal adjustment is needed to reduce risks to financial stability.
The banking system has proven resilient to domestic shocks and regional turmoil to date.
Severe shocks could expose vulnerabilities in the banking system.
Significant progress has been made to strengthen Lebanon’s financial integrity framework, though some scope for improvement remains.

The banking system has thus far proven resilient to domestic shocks and regional turmoil.
The materialization of severe shocks could expose vulnerabilities.
Fiscal adjustment is identified as necessary to reduce risks to financial stability.
Central bank policies have been a key factor in maintaining confidence.

Significant progress has been made to further strengthen Lebanon’s financial integrity framework.
Some scope for improvement in the financial integrity framework remains.