End of the Party: Why Lebanon’s Debt Crisis Has Left It Vulnerable

In 2008, as mountains of bad debt collapsed and economies around the world crumbled, carefree gamblers at the central bank-owned Casino du Liban rolled dice and spun roulette wheels, the Financial Times reported. Unscathed by the global financial crisis, Beirut glittered as the Middle East’s party capital and purveyor of discreet financial services. Lebanon offered wealthy investors something they could not get elsewhere — high interest rates for low risk investments. While the rest of the world’s central banks tried to boost post-crisis recovery by holding borrowing costs at 1 per cent or less, the Banque du Liban pushed rates up so high that returns of more than 10 per cent became common for depositors. Read more