Many analysts commended Lebanese banks on their good performance in an economy crippled by political and social instability. Today, however, scrutiny of banks’ portfolios reveals that they are heavily exposed to the indebted government and the Central Bank, which could jeopardize their long-term viability. Banks were acting as a cushion and filling the financial performance gap with credit. In the short run, this was a viable solution yet risky, given the fact that they provided a short-term solution to a long-term problem.
what we aim to do in this note is to provide suggested measures/proposals on how to deal with one important consequence of the crisis: bank restructuring.
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Lebanese Economic Crisis and Banking Restructuring