|Union of Arab Banks opens local flagship
|Move seen as vote of confidence
Prominent figures from the country's financial community convened on Monday for the official opening of a new Arab Finance House headquarters in the Mina al-Hosn area of the capital. The headquarters will serve as a local flagship for the Union of Arab Banks (UAB).
Central Bank Governor Riad Salameh, UAB president Joseph Torbey and Association of Banks in Lebanon president Francois Bassil were among the figures inaugurating the new 10-storey building.
Founded in March 1974, the Union of Arab Banks comprises more than 300 regional lending institutions.
Salameh hailed the opening of the new headquarters as a sign of confidence in the future of Lebanon and determination to maintain the country as regional banking center.
Salameh said the government had managed to preserve the stability of the Lebanese pound despite difficult conditions in the country.
"The continued Arab support and Paris III donor conference have cemented this stability and helped boost the balance of trade payments as well as increase the Central Bank's foreign currency reserves," Salameh said.
He projected a stability for the Lebanese currency in 2007, adding that the interest rates on local and foreign currencies would remain the same.
But Salameh suggested that reducing the cost of borrowing in Lebanon was not feasible in the near future.
"A reduction in the cost of borrowing in Lebanon is linked to a drop in sovereign risk and this is linked to a suitable political environment and the implementation of reforms," he said.
He added that the International Monetary Fund (IMF) is expected to monitor the execution of reforms in the country.
"Lebanon must implement all the reforms without any dictations from the IMF. But any delay in these reforms will only smear our reputation which is the most important capital for our country," Salameh said.
A team from the IMF has recently concluded meetings with officials from the Finance Ministry and leading bankers to assess the fiscal situation after the Paris III conference.
The IMF is expected to release a report on Lebanon soon, outlining the strength and weaknesses in the reform proposals submitted by the government during the conference.
But many rating agencies expressed fear that the political deadlock may delay reforms and if this happens the public debt will reach more than $43 billion in 2007.
Torbey also hailed the opening of the new headquarters.
"First, I would like to point out that the Union of Arab Banks succeeded in accomplishing great successes during the past years in developing and expanding its activities and roles on the banking and economic fronts," he said.
Torbey said that that the UAB has deemed it necessary to expand, develop, maintain and consolidate its relationship with regional and international organizations and institutions specialized in banking, finance and economy.
"In this respect, the UAB has gained strong and special international business relationships with the United Nations and its agencies and affiliates, in addition to many financial and economic institutions such as the World Bank, the IFC, the OECD and others," Torbey said.
The UAB comprises financial and banking institutions including the biggest Arab banks.
The members of the Union consist of two categories. The first category combines active members and includes all Arab banking, financial, and investment institutions and joint Arab foreign banking institutions. The second category combines observer members and includes Arab central banks, Arab banking associations and joint Arab-foreign institutions.
The Daily Star