Lebanese Banking System: Ponzi or Not?
DOI:
https://doi.org/10.55908/sdgs.v11i6.1204Keywords:
banking sector, ponzi scheme, economic crisis, bank clients, LebanonAbstract
Objective: Lebanon is currently in its third year of an economic crisis that started in 2019 when the banking system collapsed under the weight of massive public debt, the result of decades of corruption and incompetence as well as an unsustainable financing mechanism and the ineptitude of those in power. Many people are wondering why Lebanon’s perversive financial system exists and many financial critics compared the banking system to a Ponzi scheme which has never been supported or refuted before by scholarly research that has been published. Taking into consideration the gap in the body of prior research and writing, the following study aims to address its focal question: Can the Lebanese banking sector be compared to a Ponzi scheme?
Method: To test the hypothesis, a survey was delivered to the bank’s clients receiving 432 responses.
Results: Based on the responses, the hypothesis was verified at least from the point of view of Lebanese citizens who believe they were tricked and deceived by a Ponzi scheme.
Conclusion: Due to the significant harm caused by Ponzi schemes, international authorities are considering conducting extensive interrogation into this destructive enigma. Hence, for future work, it is recommended to conduct a qualitative study to gather data from the perspective of professionals in the Lebanese banking sector, financial market experts, and economic analysts.
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