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Lebanon central bank chief got it right

Posted by Mickel
Salame was invited to open the stock market on Wall Street next monday.  He was invited because people were impressed with how well he managed the global financial crisis.
Riad Toufic Salame bucked pressure in 2005 and kept Lebanese banks from investing in mortgage-backed securities. Now the sector is prospering amid the global downturn.
Reporting from Beirut — Throughout history, men braved the odds to perform great feats. Outmatched generals snatched victory from the jaws of defeat. Titans of industry gambled on bold innovations to reap jackpots. Athletes tested the limits of human endurance in quests for glory.

Riad Toufic Salame, the governor of Lebanon’s central bank, is not one of those men.

Instead, the silver-haired banker became a hero by playing it very, very safe. In 2005, he defied pressure from the Lebanese business community and bucked international trends to issue what now looks like a prophetic decree: a blanket order barring any bank in his country from investing in mortgage-backed securities, which contributed to the most dramatic collapse of financial institutions since the Great Depression.

So as major banks in America and Europe were shuttered or partly nationalized and thousands of people in the U.S. financial sector were laid off, Lebanon’s banks had one of their best years ever.

From the LA Times

Filed under: Economical, Lebanon
Posted by Mickel on 02.25.09 @ 6:49 pm | 5 Comments

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5 Comments. Add your own...

  • 1. Arze | February 26th, 2009 at 9:05 am

    Hes a master mind : )

  • 2. kezballah | February 26th, 2009 at 10:05 am

    Arze I don’t want to take credit from Mr. Salame but I don’t say he is a master mind, he is a very conservative mind and he is very good at his job he is not afraid to apply what he thinks is right.

    There was too much writing about the financial crisis before it happen, no one knew it will be this big but I was reading about it for 3 years, Mr. Salame did the right thing and play conservative. He is not in the job to do nothing, he is doing things and he is good at it.

  • 3. Arze | February 26th, 2009 at 3:56 pm

    you really think it was easy for some1 to maintain such a conservative regulation when the whole world was facing a huge growth ?
    Do you think its not temptative to just open the fiscal market to the public in the name of General growth ?
    He is a master mind indeed…because lots of people read about that crisis ,saw it coming and didnt stop because of their greed ! ,Salami is unique because he managed to keep the lebanese reputation as is , and our banking system is the only remaining element in lebanon that allows us to call urselves Swiss of the middle east .

  • 4. kezballah | February 26th, 2009 at 4:56 pm

    But don’t forget that the regulation is on the banking sector which was already healthy in Lebanon, making more growth than anyone else here, so maybe it is not easy to maintain this regulation but it wasn’t extraordinary to do it in my opinion. Why I say this: because Salame policy is the same one that Lebanon did for 50 years, we have trauma from Intra Collapse until today and we have the same conservative policy all these years, everyone switch away from Gold we keep the Gold, everyone got into the mortgage securities we don’t, his way is consistent with the past that is all I am saying.

    He is great at the job of Governor of Central Bank OF LEBANON, but I don’t rush to say he is a financial genius. Maybe he is but I need to see how he handle the next 2 years which will be VERY DIFFICULT like everyone is writing!

  • 5. LF France | February 27th, 2009 at 4:15 pm

    well you can say so far so good



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