Latest news with #FinancialGapLaw
MTV Lebanon
02-07-2025
- Business
- MTV Lebanon
02 Jul 2025 11:54 AM Salam Vows to Confront and Ramp Up Pressure
Lebanese Prime Minister Nawaf Salam considered the Economic Council 'an essential societal partner at this critical moment, and salvation can only come through genuine reform that establishes a modern state capable of earning the trust of its citizens and the world.' He emphasized that 'we are intensifying pressure to implement Resolution 1701, and the state continues its efforts to extend its authority over all territories to limit weapons, curb smuggling, and enhance safety at the airport.' Salam stated that 'the visits by President Joseph Aoun and myself to several countries were aimed at bringing Lebanon back into the Arab and international fold. There can be no investment or services without financial and economic stability.' He added, 'We are working to complete the Financial Gap Law and to pass the Banking Secrecy Law as a foundation for financial reform. The state is striving to improve its services, and the economy cannot recover without reactivating the credit role of the banking sector.' He noted, 'Without a fresh flow of credit, the economic cycle will remain paralyzed. Our negotiations with the International Monetary Fund are progressing, and our goal is to sign an agreement during the government's term.' Salam stressed, 'Our priority is to expand the partnership between the public and private sectors and allocate support to the most affected industries. We have launched a tourism plan to encourage the return of expatriates and to welcome Arab tourists.' He added, 'The master plan for Qlaiaat Airport has been completed in preparation for its launch. We visited the South, North, and Bekaa regions to assess their needs, and we are working on modernizing public administration through merit-based appointments.' 'We have adopted a new public sector hiring mechanism based on competencies to improve services, and we are working on transforming the Beirut Public Library into a cultural center and renovating the Camille Chamoun Sports City,' Salam said. The Prime Minister affirmed that 'reconstruction is a practical political and economic matter to keep people on their land and restore what the war destroyed, and we are launching reconstruction efforts transparently.' He concluded, 'We look forward to activating the role of the Economic Council to serve as a bridge between the state and citizens. We have chosen not to avoid challenges but to confront them and start, no matter how difficult the path may be.'
LBCI
30-04-2025
- Business
- LBCI
Financial overhaul: Finance Committee debates bank reform, fails to move forward on legislation
Report by Lara El Hachem, English adaptation by Yasmine Jaroudi A heated three-hour session of Lebanon's Parliamentary Finance and Budget Committee failed to advance the draft banking reform law, as MPs debated the general framework without addressing specific provisions or proposed amendments. The meeting saw unusually high participation, with 45 MPs in attendance. While many emphasized the importance of safeguarding depositors' rights, some MPs left the session describing the discussions as unproductive, while others viewed them as constructive. The law, which outlines a roadmap for restructuring Lebanon's embattled banking sector, remains unenforceable pending the passage of the Financial Gap Law, as stipulated in Article 37 of the draft. Although most parties agreed on this matter, deep divisions emerged over its implications. Hezbollah criticized the premise of tying one law to another that has yet to be introduced, calling the open-ended timeline for enacting the Financial Gap Law a 'legal flaw.' The Amal Movement echoed that sentiment. The Lebanese Forces Party urged lawmakers to accelerate the review of both laws to hasten the restructuring of banks and restore financial stability. Meanwhile, the Free Patriotic Movement (FPM) accused the bill of legalizing "haircuts" on deposits, calling for a comparative study of how other countries have addressed similar crises. Finance Minister Yassine Jaber, who attended the session, defended the government's draft, citing international examples and reiterating that work on the Financial Gap Law would begin after the Banque du Liban (BDL) shares its input. Committee Chair Ibrahim Kanaan announced that BDL governor Karim Souaid will appear before the committee next week after missing Wednesday's meeting due to travel. In a statement, Souaid confirmed that he would submit the first draft of the banking restructuring plan, emphasizing that all stakeholders should align behind a single goal: achieving a gradual and sustainable economic recovery. The bank stressed that this must be based on a stronger banking sector, an independent central bank, and a fair, realistic mechanism for repaying depositors over time.
LBCI
09-04-2025
- Business
- LBCI
Lebanon under pressure to pass key financial reforms—What are the IMF's conditions?
Report by Lea Fayad, English adaptation by Yasmine Jaroudi As Lebanon braces for the upcoming International Monetary Fund (IMF) Spring Meetings in Washington on April 21, pressure is mounting on the government and parliament to finalize crucial financial legislation. A visiting IMF delegation delivered a clear message to Lebanese officials: no dollar in foreign aid will reach Lebanon without compliance with the fund's conditions. These include the government's appointment of a new board for the Council for Development and Reconstruction and Parliament's approval of two long-stalled financial reform laws. The first law involves amendments to Lebanon's banking secrecy legislation. It has already been referred to Parliament and forwarded by Parliament Speaker Nabih Berri to the joint committees, which are set to begin discussions this coming Wednesday. The bank restructuring and regulation law is the second—and more complex—law. The government failed to pass it in Tuesday's most recent Cabinet session. Ministers have been asked to submit written feedback to the Finance Ministry's expert committee that drafted the law, hoping to finalize it by the end of the week. This legislation outlines how banks will be evaluated—identifying which can recapitalize and continue operating, and which will be liquidated. Its implementation is closely tied to a third law: the Financial Gap Law, which will determine the size of banking sector losses and the mechanism for returning deposits. However, the IMF does not require this third bill before the April 21 deadline. Still, several Cabinet ministers have expressed reservations, particularly over moving forward without a clear calculation of the financial gap, warning that any change in loss estimates could upend the restructuring strategy. Concerns have also been raised about a provision stipulating that deposits in banks slated for liquidation be transferred to the Deposit Guarantee Institution, which currently only guarantees deposits up to LBP 75 million—around $830 at current rates. Even if the Cabinet manages to approve the restructuring bill by the end of the week, Parliament will be left with just two days to review and pass both laws before the IMF meetings. With that narrow timeline, lawmakers and observers are questioning whether the process can be completed in time. As doubts grow over whether Parliament can move fast enough, questions are resurfacing: Will opponents of the IMF deal attempt to derail these laws—and with them, Lebanon's last viable path to a financial rescue?
