| Salameh kicks off trading on New York Stock Exchange |
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| Tuesday,March 03,2009 Posted: 16:00 BJT(0800 GMT) net |
03 March 2009
BEIRUT: Banque du Liban Governor Riad Salameh on Monday became the first Arab central bank governor to ring the opening bell signaling the start of trading in New York Stock Exchange. Salameh, who headed a high-level Lebanese delegation from the Beirut Stock Exchange, as well as the business and banking sectors, rang the bell, ushering the start of active trading on the world's biggest bourse.
During a dinner in his honor, Salameh explained in a speech why Lebanon managed to survive the banking crisis that hit most countries in the world, most notably the US.
"It is noteworthy that the Lebanese financial model, as designed through the years, does not authorize any excess in borrowing or in the acquisition of toxic products. Thus, Lebanon will be able to weather the financial storm, as long as it's political and security situation remain stable," the governor said.
He added that the stability the Lebanese market was witnessing was not due to a combination of random circumstances but to perseverance and hard work aimed at building a confidence-inspiring model.
In fact, the model was put to the test "following the assassination of former Prime Minister Rafik Hariri, the assassination or assassination attempt of leading Lebanese figures, following explosions in business centers, the 2006 war, the severe internal crisis of 2007 and 2008 [with street fighting], and finally the world financial crisis" he said.
Salameh listed the principles which Lebanon followed.
"Refusing any act that might lead to banks' bankruptcy or impose losses to any depositor of correspondent of a Lebanese bank. In this regard, 33 banks have ceased their activities during the last 15 years, and no incident similar to that of Lehman Brothers was registered."
Salameh added that "complying with market tendencies for determining interest rates, and refusing constantly to reduce these rates in favor of any party such as the public or private sector" were among the models Lebanon adhered to. "Needless to say, such a stance has hampered speculation, particularly in real estate and the stock exchange," he said.
Salameh added that regulations which cover credit and investment have been adopted in order to keep important liquidity in the banking sector, and limit investment in structured products and prohibiting investment in subprime securities.
"Stabilizing the Lebanese pound exchange rate against the US dollar [has created] a center of confidence and reduced inflation," he said.
Salameh stressed that the Lebanese financial sector would always be marked by soundness and strength, provided the political and financial climate remains stable.
"There is now an opportunity for building a modern and dynamic economy that enhances job creation and improves purchasing power. However, the implementation of reforms and the existence of a political will are a sine qua non," Salameh said. - The Daily Star
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