Lebanese Cabinet works to finalize IMF-aligned financial gap law, focus on deposit security

Report by Bassam Abou Zeid, English adaptation by Mariella Succar

Lebanon’s Cabinet is working to finalize a version of the draft financial gap law that satisfies both depositors and banks while ensuring the state assumes responsibility for restoring deposits, without any side feeling it has gained an advantage over another, according to officials.

In Baabda, discussions were open to all ideas and observations presented by ministers from various political factions. 

Prime Minister Nawaf Salam and Finance Minister Yassine Jaber, who met with U.S. Ambassador Michel Issa, Economy Minister Amer Bisat, and Central Bank Governor Karim Souaid, responded attentively. 

These officials are considered the main architects of the proposal, developed in coordination with the International Monetary Fund.

The session in Baabda addressed four articles in the draft law, with amendments made to three. Debate continues over the fourth article, related to the assessment of the central bank and commercial banks. This article is key to clarifying the scale of losses and their allocation. 

Officials stressed that passing the law both in the Cabinet and in Parliament is essential to mitigate Lebanon’s ongoing financial and economic challenges.

The discussions are set to continue in Tuesday’s session. Current information suggests the Cabinet will approve the draft largely in line with the IMF’s framework, placing the primary responsibility on banks.

The bill will then move to Parliament, where debate is expected to focus on protecting depositors and their savings, especially as parliamentary elections approach.