The Lebanese government has approved a draft law to reform and restructure the country’s banking sector, marking a significant step towards addressing the financial crisis that has persisted since 2019, reports Arab News.
Following a four-hour Cabinet session chaired by Prime Minister Nawaf Salam at the Grand Serail, Information Minister Paul Morcos announced that the approved legislation prioritises protecting depositors, particularly small savers.
“Within a few weeks, we will achieve the reform package that Lebanon, its economy, and its banking sector need, especially the small depositors,” Morcos said. He added that the government is now drafting another bill to tackle the financial deficit, which would help restore fiscal stability, according to the National News Agency.
The new banking reform law, consisting of 39 clauses, follows recent amendments to Lebanon’s banking secrecy laws – a key demand for transparency and accountability. Morcos emphasised that the reforms align with conditions set by the International Monetary Fund for potential financial assistance.
Morcos expressed optimism, noting that after the removal of banking secrecy, the government had quickly moved forward with reforms in accordance with IMF requirements. He added that a third phase – focused on tackling the fiscal deficit – is anticipated in the near future, reflecting ongoing efforts to stabilise Lebanon’s struggling economy.
Speaking to local media prior to the Cabinet session, Economy Minister Amer El-Bisat noted that the IMF recognised the complexity of banking reform, requiring extensive political and legal discussions.
Meanwhile, Labour Minister Mohammad Haidar clarified that the law focuses on bank restructuring rather than immediate solutions for depositors’ frozen funds.
The move was welcomed by the UN special co-ordinator for Lebanon, who called it a sign of the government’s commitment to reform. “This positive momentum must continue in parliament and of course, later, in practice,” UNSCOL stated on X.
Lebanon’s economic collapse since 2019 has seen the Lebanese pound lose nearly all its value, plunging millions into poverty while depositors remain unable to access their savings.
The international community, including the IMF and the World Bank, has long demanded structural reforms in exchange for aid, blaming the crisis on decades of corruption and mismanagement.
Central Bank Governor Karim Souaid and other Lebanese officials are set to meet IMF representatives later this month during World Bank meetings in Washington, as Lebanon seeks a new financial rescue plan.
On May 7, World Bank managing director of operations Anna Bjerde began a two-day visit to Lebanon to discuss the country’s socio-economic challenges and reinforce the institution’s commitment to supporting Lebanon during this critical period.
The discussions focused on the World Bank’s planned support in the coming years, particularly in water security, renewable energy expansion, and digital public services – key areas for Lebanon’s transition toward sustainable development. These efforts build on prior analytical work and policy reports designed to guide public debate and decision-making.
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