Syria-Germany Bank Deal Targets Three-Year Capacity Push

Economic expert and Aleppo University business professor Dr. Khalil Hamdan said the Syrian-German economic dialogue, along with the banking agreement signed between the Central Bank of Syria and Frankfurt School of Finance and Management, backed by Germany's KfW development bank, should not be viewed as a ceremonial activity or a one-off training program. Instead, he described it as a signal of a shift toward a more advanced stage built on transferring expertise, strengthening institutions, and preparing the economic environment to attract foreign investment.

German Banking Sector Expertise

Hamdan noted that this step gains particular importance given Germany's long experience in banking supervision, risk management, governance, compliance, and financing productive and developmental projects. He pointed out that the German model rests on a diverse system combining:

• Private commercial banks
• Savings banks and regional banks
• Cooperative banks
• Specialized development banks

This diversity, he explained, has allowed Germany to combine commercial efficiency with local economic financing, support for small and medium enterprises, and infrastructure funding.

Relevance to Syrian Needs

Hamdan argued that reforming Syria's banking sector goes beyond modernizing the Central Bank's operations, extending to rebuilding the role of public banks, revitalizing private banks, expanding financing directed to productive sectors, and improving small and medium enterprises' access to credit. He added that KfW's participation offers added value beyond financing, drawing on its institutional experience in designing development programs, evaluating projects, financing infrastructure, and measuring economic and social impact.

Three Years of Capacity Building

The training program spans three years, which Hamdan said allows a shift from short, scattered courses to a continuous track for banking capacity building. He stressed that the agreement's success should not be measured by the number of courses delivered, but by the actual change it produces in institutional performance, including credit and liquidity risk management, governance, compliance, internal audit, and digital transformation.

He emphasized the importance of adopting a train-the-trainer model to ensure knowledge spreads to a wider group of staff, while distinguishing between transferring expertise and literally replicating the German model, given differences in the legal, economic, and institutional environment.

A Gateway to Attracting Investment

Hamdan noted that having a banking sector with professional competencies and reliable regulatory systems is a fundamental condition for attracting investment, since foreign investors care about clear laws, ease of transferring funds, procedural stability, and contract protection. He said bringing together Syrian and German companies and officials allows a shift from general rebuilding rhetoric to identifying implementable projects, citing the water and energy sectors as areas that could benefit from German expertise, technology, and financing, provided clear projects are prepared with feasibility studies and financing models.