| 01 Dec 2009 |
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French banking boss lauds Lebanese prudence
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01 December 2009
BEIRUT: The governor of the Banque de France, Christian Noyer, praised Lebanon’s stringent banking regulations for their good practice as he addressed a select audience of Lebanese bankers at Banque du Liban’s headquarters in Beirut on Monday. Noyer’s remarks came as he spoke about the need for governments to reform their financial and budgetary policies to create lasting plans to haul their respective economies from the devastating effects of the financial crisis.
“In a certain way, the entire world will converge toward the Lebanese regulations,” Noyer said, referring to the severe banking regulations that famously characterize Lebanon’s banking sector, an accolade to which the audience reacted with a sudden outburst of applause.
Noyer also offered a quick insight on his perspective of the looming financial crisis in Dubai, following shocking news last week that state-owned investment giant Dubai WorldDubai World
told creditors it would default on payments of its $59 billion loan. His comments, coming in response to a question from the audience, were guarded.
told creditors it would default on payments of its $59 billion loan. His comments, coming in response to a question from the audience, were guarded.
“I trust that the central bankcentral bank of the United Arab Emirates will take necessary measures to ensure the [Emirate’s] banking stability,” he said.
of the United Arab Emirates will take necessary measures to ensure the [Emirate’s] banking stability,” he said. In his address, Noyer expressed his belief that world economies were surfacing, at last, from the financial malaise that rocked world economies for the last two years.
“The current revival [of the world economic system] is well into gear … [The world economy] is now following a pace that is superior, or close to, that which has prevailed, on average, for the [past 10 years],” said Noyer.
Concerning the French economy, Noyer said the Bank of France was expected to confirm its revival during the fourth quarter of this fiscal year.
But Noyer warned that the current upswing of the global economy resulted, in part, from a series of conjectural factors and short-term policies that would offer a temporary fix rather than a permanent cure.
In order to sustain their growth in the long-term, the central bankcentral bank governor pointed to the need for governments to reform their budgetary and economic policies.
governor pointed to the need for governments to reform their budgetary and economic policies. In Europe, he called for a more comprehensive integration of the economies of the eurozone through liberal structural reforms.
“The crisis offers the opportunity … to proceed with reforms that must be taken to raise the potential for growth,” said Noyer.
Worldwide, Noyer said strategies were needed to replace the emergency policies adopted as a temporary salve to the economic crisis.
Noyer said that conclusions reached by world leaders at a recent G20 meeting should serve as a benchmark to help design domestic reform policies, which governments need to adopt in order to achieve long-term economic viability.
“The heads of state and of governments of the G20 … have given a strong political impetus to these reforms in their [last] meeting,” he said.
While meeting in Pittsburg last April, world leaders agreed on a “road map” of economic reforms, which focused on the reinforcement of financial regulations, the strengthening of multilateral oversight, and of renewed assistance to strong international financial and banking institutions.
Referring to a counter-example, the banker took a quick jab at China as he warned against the country’s controversial monetary policy.
Western economies have vehemently accused China over the last years of boosting its competitive edge on the world marketplace by artificially undervaluing its currency, the yuan.
“Regarding this, we have, in Europe, the feeling that China should progress,” said Noyer.
© Copyright The Daily Star 2009.
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