Lebanon restructures banks and costs
The Lebanese Parliament approved amendments to the bank restructuring law aimed at addressing the situation of distressed banks and defining the way losses are distributed. This step is considered highly important in restoring confidence and re-establishing credit in the Lebanese economy. The International Monetary Fund welcomed this move, viewing it as a significant development on the path to reforming the financial sector. However, IMF officials emphasized the need for broader reforms, including the Financial Stability Law and deposit recovery measures. According to the IMF, the losses in Lebanon’s financial system amount to approximately $70 billion. Delays in restructuring have led to a decline in foreign deposits from $96 billion in 2020 to $40 billion in 2023, increasing risks for depositors. The IMF stresses the importance of determining the extent of losses and ensuring their fair distribution, while protecting small depositors and ensuring transparent accountability.
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