The State of Banking in Syria Today

The banking system in Syria has been severely impacted by the ongoing conflict. The country's economy has been in shambles since the war began in 2011.

The Syrian government has struggled to maintain control over the banking sector, with many banks experiencing significant losses. As a result, the banking system has become increasingly fragmented.

The Syrian pound has lost significant value against major currencies, making it difficult for people to access basic services like healthcare and education. In 2020, the exchange rate was 1 USD = 2,500 SYP.

The lack of trust in the banking system has led to a cash-based economy, with many people relying on cash transactions rather than bank accounts.

The history of banking in Syria dates back to the Ottoman Empire, where the first banks were established in the 19th century.

The Ottoman Bank, founded in 1856, was one of the first banks in Syria, and it played a crucial role in the country's economic development.

The bank's establishment marked the beginning of modern banking in Syria, and it paved the way for the development of other financial institutions.

The Ottoman Bank's success can be attributed to its innovative approach to banking, which included the introduction of new banking practices and the use of modern technology.

By the early 20th century, several other banks had emerged in Syria, including the Banque de Syrie, which was established in 1912.

The Banque de Syrie was a French-owned bank that played a significant role in the country's economic development during the French Mandate period.

The bank's activities included providing loans to farmers and merchants, as well as managing the country's foreign exchange and trade operations.

The establishment of the Central Bank of Syria in 1948 marked a significant milestone in the country's banking history, as it provided a central authority for monetary policy and banking regulation.

The Central Bank of Syria has since played a crucial role in the country's economic development, and it continues to be a key player in the Syrian banking system today.

The banking system in Syria has undergone significant changes since the crisis. Private sector banks saw a 63.6 percent drop in assets from $13.8 billion to $5.0 billion in dollar terms.

Total customer deposits decreased by 73.0 percent to $3.0 billion, indicating a substantial withdrawal of funds. The average nonperforming loans ratio at the fourteen banks increased from 3 percent to 41 percent.

This led to substantial write-offs, resulting in an 82.5-percent drop in total net loans and advances to $976 million.

The Syrian commercial banking sector has a significant presence in the country's financial landscape. The assets of the sector reached a notable milestone at the end of the first quarter of this year.

The assets of the Syrian commercial banking sector reached SYP 1.74 trillion (USD 36 billion). This impressive figure highlights the sector's growth and importance in the country's economy.

The Central Bank of Syria is responsible for monitoring and regulating the banking sector's activities.

The aggregate balance sheets of private banks in Syria expanded by 34.6 percent, from SYP650 billion to SYP875 billion, between 2010 and 2013.

This expansion appears to be misleading, as the Syrian pound's devaluation from 47 to 174 per U.S. dollar significantly reduces the value of their assets.

In dollar terms, the expansion turns into a 63.6 percent drop in assets from $13.8 billion to $5.0 billion.

The value of total customer deposits also decreased by 73.0 percent to $3.0 billion.

The average nonperforming loans ratio at the fourteen banks increased from 3 percent to 41 percent, leading to substantial write-offs.

As a result, total net loans and advances dropped by 82.5 percent to $976 million.

The net loans-to-deposits ratio also decreased from 51 percent to 33 percent.

Shareholders' equity was partially protected, as around half of total paid-up capital was contributed and maintained in U.S. dollars.

However, aggregate shareholders' equity still decreased by 49.8 percent to $734 million.

This represents 14.6 percent of total assets, compared to 10.6 percent of total assets at year-end 2010.

Despite the challenges, banks were still able to generate a pretax profit of SYP1.3 billion in the first nine months of 2013.

The economic impact of banking in Syria is a complex issue. The country's banking system has been severely affected by the ongoing civil war, resulting in a significant decline in economic activity.

Syria's GDP has been steadily decreasing since 2011, with a 63.1% drop in 2014 alone. The war has led to a sharp decline in foreign investment, which was once a significant contributor to the country's economy.

The Central Bank of Syria has struggled to maintain economic stability, with a significant increase in inflation rates. In 2019, the inflation rate reached 47.3%, making it difficult for people to afford basic necessities.

The banking system in Syria has also been impacted by international sanctions, which have limited the country's access to global financial markets. This has made it challenging for businesses to access credit and finance their operations.

The Syrian pound has lost significant value against the US dollar, with a 90% devaluation between 2011 and 2019. This has led to a shortage of foreign currency, making it difficult for people to import essential goods.

The economic instability has had a devastating impact on the Syrian people, with many struggling to access basic services and necessities. The country's economic future remains uncertain, with a long road to recovery ahead.

The Syrian Central Bank has been subject to U.S. sanctions since May 2004, under Section 311 of the Patriot Act, with the Bank being accused of money laundering.

These sanctions have had a significant impact on the country's financial system, shutting Syria out of the global financial system. The U.S. sanctions increased the role of Lebanese and European banks because a ban on transactions between US financial institutions and the Syrian Central Bank increased the demand for intermediary sources for US$ transfers.

Since the start of the Syrian Civil War in March 2011, the U.S. has imposed various sanctions on Syria, including the Caesar Act, which came into effect on 17 June 2020.

Syria started reforms in the financial sector in the 2000s. The country legalized private banks in 2001, allowing the sector to grow.

The old Money and Credit Council and the Central Bank of Syria were reactivated in 2001, restoring their role as monetary policymakers and regulators. This move marked a significant shift towards a more liberalized financial system.

Foreign banks were given licenses in December 2002, under Law 28 March 2001, which allowed the establishment of private and joint-venture banks. This law also capped foreign ownership at 49%.

The Damascus Securities Exchange was opened in March 2009, providing a platform for investors to buy and sell securities. This move was a major step towards deepening the country's capital markets.

Syria took gradual steps to loosen controls over foreign exchange, starting with the decriminalization of private sector use of foreign currencies in 2003. This change allowed individuals and businesses to use foreign currencies for legitimate purposes.

Licensed private banks were allowed to sell specific amounts of foreign currency to Syrian citizens under certain circumstances in 2005. This move helped to increase access to foreign exchange for individuals and businesses.

In October 2009, Syria further loosened restrictions on currency transfers by allowing Syrians travelling abroad to withdraw up to US$10,000 from their Syrian pound accounts. This change made it easier for individuals to access foreign exchange for travel and other purposes.

The government allowed investors to receive loans and other credit instruments from foreign banks in 2007. This move was aimed at attracting investment and easing access to credit for businesses.

In February 2008, the government permitted investors to receive loans in foreign currencies from local private banks to finance capital investments. This change helped to increase access to foreign credit for businesses.

The law passed in 2006 permits the operation of private money exchange companies. However, a black market for foreign currency still exists in the country.

The Syrian Central Bank has been subject to U.S. sanctions since May 2004, under Section 311 of the Patriot Act, with the Bank being accused of money laundering.

These sanctions shut Syria out of the global financial system, increasing the demand for intermediary sources for US$ transfers.

Syrians have been forced to effect foreign transactions through banks in neighboring countries, especially Lebanon, to circumvent the sanctions.

The U.S. sanctions imposed by the Caesar Act came into effect on 17 June 2020, further restricting Syria's access to the global financial system.

Syria has been subject to various sanctions by the U.S., Canada, EU, Arab League, and Turkey due to its government actions during the Syrian Civil War, which began in March 2011.

There has been a movement of funds out of the country to nearby countries since the start of the Civil War and due to international sanctions.

Regulatory reform is a crucial aspect of regulations and sanctions. It involves revising or updating existing regulations to make them more effective, efficient, and fair.

The goal of regulatory reform is to reduce the burden on businesses and individuals while maintaining public safety and protection. This can be achieved by streamlining processes, eliminating unnecessary requirements, and increasing transparency.

In the United States, the Regulatory Right-Sizing Initiative aims to reduce regulatory costs by 25% over five years. This initiative focuses on reviewing and revising regulations that have a significant impact on the economy.

Regulatory reform can also involve the use of technology to improve compliance and reduce costs. For example, the use of electronic records and digital signatures can reduce paperwork and increase efficiency.

The European Union's Better Regulation Agenda aims to simplify and improve the regulatory framework for businesses. This agenda includes measures such as reducing administrative burdens and increasing transparency.

Regulatory reform is an ongoing process that requires continuous monitoring and evaluation. It involves working with stakeholders, including businesses, civil society, and the public, to identify areas for improvement.

The UK's Brexit process has also led to regulatory reform, with the aim of reducing regulatory barriers and increasing flexibility. This includes reviewing and revising EU regulations that have been transposed into UK law.

The official exchange rate for the Syrian pound has been steadily decreasing since the start of the Syrian Civil War in March 2011, from LS 47 = US$1 to LS 700 in March 2020 and LS 1,250 in June 2020.

The black market is a major source of foreign currencies for Syrian nationals, especially for those who want to travel abroad or circumvent sanctions by effecting foreign transactions through banks in neighboring countries.

As of 29 November 2019, the black market rate was LS 765 = US$1, a 30% decrease since the turmoil started in Lebanon a month earlier, due to Lebanese banks imposing tight controls on hard currency withdrawals and transfers abroad.

The Syrian pound has been devaluing significantly since the start of the Syrian Civil War. Its official exchange rate has fallen from LS 47 = US$1 in March 2011 to LS 700 in March 2020 and LS 1,250 in June 2020.

The official exchange rate was LS 515 in July 2017, when the peg for the Syrian pound was changed to the IMF SDR. The official rate on 2 December 2019 was LS 434 = US$1.

The black market is the only source of foreign currencies for Syrian nationals who want to travel abroad. This is because the official exchange rate is no longer reliable, and the black market offers a more realistic exchange rate.

On 29 November 2019, the black market rate was LS 765 = US$1, a 30% decrease since the turmoil started in Lebanon a month earlier. The black-market rate fell to LS 950 on 2 December 2019, another 25% decrease.

The Syrian pound continued to fall against the U.S. dollar in the black market during the COVID-19 pandemic. In May 2020, US$1 equaled more than LS 1,600 in the black market.

In June 2020, the Syrian pound passed LS 2,000 against the dollar, and a few days later, it passed LS 3,000 against the dollar.

Financial services and investment banks play a crucial role in facilitating economic growth and stability. They provide a range of services, including asset management, securities trading, and investment banking.

Investment banks, for example, help companies raise capital by underwriting and selling securities, such as stocks and bonds. This process involves assessing a company's creditworthiness and determining the optimal price for its securities.

Financial services firms also offer wealth management services to individual investors, helping them create personalized investment portfolios. In 2020, the global wealth management market was valued at over $1.5 trillion.

Investment banks generate revenue primarily through fees from mergers and acquisitions, initial public offerings (IPOs), and other financial transactions. In 2019, the global investment banking fees reached a record high of $64.4 billion.

By providing access to capital markets and facilitating financial transactions, financial services and investment banks help businesses and individuals achieve their financial goals.

Syria has a long history of banking dating back to the 19th century. The country's first bank, the Ottoman Bank, was established in 1897.

The banking system in Syria has undergone significant changes over the years, with the establishment of the Central Bank of Syria in 1953.

Commercial banks in Syria are regulated by the Central Bank of Syria, which sets the country's monetary policy.

Syria has a relatively high level of banking penetration, with around 70% of the population having access to banking services.