Summary OfToufic Gaspard's Paper.
In his paper “Lebanon’s Financial Collapse: A Post-Mortem” (October 2020), Dr. Toufic Gaspard presents a diagnostic of the Lebanese financial collapse and analyzes its causes and consequences prior to suggesting reforms for a sustainable economic recovery.
In his paper “Lebanon’s Financial Collapse: A Post-Mortem” (October 2020), Dr. Toufic Gaspard presents a diagnostic of the Lebanese financial collapse and analyzes its causes and consequences prior to suggesting reforms for a sustainable economic recovery. According to the author, the Lebanese banking and fiscal sectors led, separately and respectively, to the collapse of the banking sector and the LBP. Dr. Gaspard finds an interesting result: the banking collapse, according to Dr. Gaspard, does not result from the Government debt nor the BDL’s lending to the government, but rather from the banking sector’s financial engineering. Meanwhile, the government debt mainly triggered the LBP’s massive depreciation. Dr. Gaspard proves that the danger signals were obvious for many years, especially since 2015. Other than the danger signals that could have been perceived in banking and fiscal indicators, the Balance of Payments (BoP) was also indicating risk as it was in deficit since 2011. At the end of the paper, Dr. Gaspard suggests serious reforms to achieve a sustainable economic recovery. The author stresses on the importance of regaining Lebanon’s sovereignty in achieving the intricate but feasible economic recovery.