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Lebanon This Week 555

October 06, 2018
Lebanon This Week 555

Countries with an MPI score of '1' and a BSI strength of 'b'

Source: Fitch Ratings

 

  • Lebanese banking sector has low level of potential vulnerability, similar to sectors in the U.S. and Germany
    In its semi-annual risk assessment of 115 banking systems in advanced and emerging economies, Fitch Ratings placed Lebanon's banking sector among 91 banking systems with a "low vulnerability to potential systemic stress", the highest category on Fitch's Macro-Prudential Indicator (MPI). The MPI identifies the build-up of potential stress in banking systems due to a specific set of circumstances. It aims to highlight potential systemic stress that could materialize up to three years after an early warning is first detected. It said that an MPI score of '1' denotes low potential vulnerability, a score of '2' reflects moderate vulnerability, while a score of '2*' denotes moderate vulnerability accompanied by data limitations, and a score of '3' reflects a high level of vulnerability to potential systemic stress. 

    Lebanon's MPI score has been unchanged since October 2013, when Fitch upgraded Lebanon's score to '1' from a previous score of '2'. As such, Lebanon, along with Angola, Bahrain, Cameroon, Cape Verde, Gabon, Iraq, Kenya, Kuwait, Lesotho, Morocco, Namibia, Nigeria, Rwanda, Saudi Arabia, the Seychelles, South Africa, Tunisia, the UAE, Uganda and Zambia have an MPI score of '1' in the Middle East & Africa region. Other countries in this category include Australia, Canada, Denmark, Finland, France, Germany and the United States.

    In parallel, the agency indicated that Lebanon's banking sector was among 16 banking systems that have a Banking System Indicator (BSI) of 'b'. The BSI is a measure of intrinsic banking system quality or strength, derived from Fitch's Viability Ratings for banks.  Lebanon came in the 'b' category, along with Egypt and Nigeria in the Middle East & Africa region, as well as Armenia, Azerbaijan, the Dominican Republic, Ecuador, Kazakhstan, Sri Lanka and Vietnam, among others. Fitch said that 62% of banking systems in developed countries have BSIs of 'a' or higher. It added that only four banking sectors in developed economies have a BSI of 'aa' and only one sector has a BSI of 'ccc' or lower. Also, it indicated that the typical level of banking strength in emerging markets is weaker and is distributed evenly across the 'bbb', 'bb' and 'b' categories, with only one banking sector in the 'a' category and one sector in the 'ccc' or lower categories. Lebanon is one of 12 countries with an MPI score of '1' and a BSI strength of 'b'.
     

  • Trademark registrations up 4% in 2017, patents down 8%
    The Office of Intellectual Property at the Ministry of Economy & Trade issued 233 patents in 2017, which constitutes a decline of 7.9% from 253 patents issued in 2016. The Patent Law, or Law No. 240 of 2000, provides patent protection for inventions, plant varieties and layout designs of integrated circuits. The law is compatible with the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which is an international legal agreement between the member nations of the World Trade Organization. 

    Further, there were 245 copyright registrations in 2017 compared to 270 registrations in 2016, which are protected under Law No. 75 of 1999. The law protects literary and artistic works, as well as computer software and videos, among other products. Also, a total of 110 industrial design rights were registered at the ministry’s Office of Intellectual Property in 2017, nearly unchanged from 108 industrial design rights in 2016. Industrial designs rights protect the design of a variety of products in different industries, including technical and medical instruments, watches, jewelry, other luxury items, electrical appliances and vehicles, among other designs.

    In addition, the ministry registered 5,509 new trademarks in Lebanon in 2017, constituting an increase of 3.6% from 5,318 in 2016, while it renewed 1,288 trademarks last year compared to 1,311 renewals in 2016. Trademarks in Lebanon are protected by Resolution No. 2385 of 1924 that was amended by the law of December 1946 related to Commercial and Industrial Property Rights. They are also protected by the Paris Convention for the Protection of Industrial Property, the Madrid Agreement Concerning the International Registration of Marks, as well as by customs regulations, the Law on Fraud Control and the Criminal Law.
     

  • Cost of sending remittances from most sources decreases in third quarter of 2018
    Figures issued by the World Bank show that the cost of sending $500 in remittances from the United States to Lebanon reached 5.62% in the third quarter of 2018 relative to 5.77% in the second quarter of 2018 and to 6.06% in the third quarter of 2017. The cost includes the transaction fee and exchange rate margin, and represents the average cost of transferring money through commercial banks and money transfer operators (MTOs). In nominal terms, the cost of sending $500 from the U.S. to Lebanon was $28.1 in the third quarter of 2018 compared to $28.87 in the preceding quarter and to $30.29 in the third quarter of 2017. Lebanon is the sixth most expensive destination for sending $500 from the U.S. among 42 countries with available data.

    Further, the cost of sending remittances from Canada to Lebanon was 7.39% in the third quarter of 2018 for a transfer of CAD500, down from 7.5% in the second quarter of 2018 and relative to 6.51% in the third quarter of 2017. In nominal terms, the cost of sending CAD500 from Canada to Lebanon was CAD36.94 in the third quarter of 2018 relative to CAD37.52 in the previous quarter and to CAD32.54 in the third quarter of 2017. Lebanon is the third most expensive destination for sending CAD500 from Canada among 15 countries with available data.

    Also, the cost of sending remittances from Australia to Lebanon reached 6.82% in the third quarter of 2018 for a transfer of AUD500, down from 7.07% in the second quarter of 2018 and relative to 7.39% in the third quarter of 2017. The cost of sending AUD500 from Australia to Lebanon was AUD34.08 in the third quarter of 2018 relative to AUD35.34 in the preceding quarter and to AUD36.97 in the third quarter of 2017. Lebanon is the fourth most expensive destination for sending AUD500 from Australia among 16 countries with available data.
     

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