Lebanon - Banks, revolution and Immigration
Every Lebanese is an economist these days. At home and abroad, they are all proposing solutions to what has become the gravest economic crisis since the civil war’s devaluation of the Lira. The problem has lied dormant for years with the dollar peg which had been artificially maintained at 1500 Liras for 1 dollar. As most Lebanese have come to understand now, the peg was maintained by Lebanese and foreigners depositing their money in local banks for high-interest rates. In return for these, banks would buy high-interest bonds from the central bank (La Banque Du Liban). The latter would use the funds to perform forex operations to maintain the peg. All was well as long as the depositors thought that their money was safe in Lebanon and they kept pouring more money. But the same as a Ponzi scheme it was eventually going to collapse. I remember back in 2001 as a Sophomore at the American University of Beirut, taking my first ever economics class, the teacher – who only had a mas