Lebanon needs to restructure banking sector to restore confidence in financial system: Experts

Lebanon needs to restructure banking sector to restore confidence in financial system: Experts

Lebanon should restructure its banking sector to restore confidence in the financial system in the country, experts said.

Nassib Ghobril, an economist and head of the economic research department at Byblos Bank, emphasized the need to restructure banks given the economic recession, balance of payment deficit, loss of confidence and the government's decision to default on its eurobonds.

Patrick Mardini, president of the Lebanese Institute for Market Studies, told Xinhua that banks must be restructured by injecting fresh capital, attracting new shareholders or selling these banks to foreign ones.

"If some specific banks cannot recapitalize or attract interest from foreign banks, they should then consider merging with banks that are capable of attracting capital for themselves and others," Mardini explained.

Mardini emphasized that entrance of foreign banks into the Lebanese market would restore confidence in the sector.

Rock-Antoine Mehanna, economist and president at the World Economics Association-Lebanon Chapter, told Xinhua that Lebanon has around 65 banks and 1,045 branches which is considered a big number for Lebanon and they should be reduced by closing some branches and merging banks.

"Of course, this should take place in a very careful manner by looking at each bank's capital adequacy ratio," Mehanna said,