Lebanon’s Systemic Banking Crisis: Lessons from Five Decades of Global Crises
In their IMF working paper (WP/26/94) titled, “Systemic Banking Crisis Database: 1970 – 2025”, Messrs. Luc Laeven and Fabian Valencia updated the Laeven and Valencia database to reflect episodes during 1970 – 2025 (last previous update was 2020). Although it is not considered an official document from the IMF, this working paper is a significant paper as the Laeven and Valencia database is considered a global benchmark for banking crisis analysis.
The Lebanese crisis shares several characteristics with past systemic bank crises but differs in three critical aspects, being: the magnitude of losses compared to Gross Domestic Product (GDP), length of the crisis with no solution, and the absence of a restructuring framework or plan.
In this spotlight, we will discuss the main points addressed in the above-mentioned working paper and relate it to the Lebanese Banking Crisis that flared up in October 2019. In other words, we will see how Lebanon’s 2019 banking collapse map onto the typology and patterns in Laeven & Valencia (2026), what policy lessons, derived from the 55-year global dataset, apply to Lebanon’s unresolved crisis and help in devising an optimal resolution path.
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