According to announcements made by MP Ibrahim Kanaan, after the legislative session, Lebanon’s banking reform law has been approved incorporating amendments from the Finance and Budget Committee, with the exception of one article and a paragraph from another, noting that this law relates to the post-implementation phase of the financial alignment law and the recovery of deposits.
Banking Reform and Financial Alignment in Lebanon
The banking reform law has now cleared its second legislative approval, a milestone Kanaan hopes will be the last, because the core of solving the banking, financial, and monetary crisis in Lebanon lies in the financial alignment law. As outlined by Kanaan, as the law came from the government in coordination with the International Monetary Fund, the current crisis was excluded from many provisions and conditions and included within the financial alignment law.
Additional reporting from Gulf Channels notes that Kanaan stressed the necessity of treating depositors and investors seriously to restore economic health. Lebanon24 reports that during committee discussions, the head of the Finance and Budget Committee stated that they amended Article 3 in an acceptable formula under the provisions of the Code of Money and Credit, notably Article 70, wanting to understand and reach a mutual understanding with the IMF and international authorities without coming at the expense of local understanding, laws, and the interest of the people. Furthermore, lawmakers clarified Article 13 of the banking reform law in agreement with the government and Banque du Liban, ensuring the Higher Banking Commission has all powers regarding banking reform, but is not a central board and does not issue circulars, but rather recommends them.
Did You Know?
For the first time in six years, the government’s draft project includes a mechanism for recovering deposits—a primary demand of the Finance and Budget Committee since 2020.
Government Obligations and Deposit Recovery
Kanaan emphasized that recovering deposits is what restores confidence in the Lebanese economy and the banking system. While international trust from the IMF and international institutions is required, Kanaan argued that it is not enough if the depositor and investor do not feel their rights are protected and that they are being dealt with seriously. The Finance and Budget Committee maintains that the government is demanded to finish reviewing the financial alignment law at the earliest opportunity.
Kanaan stated that they will have a position next September and will not accept the continuation of procrastination in the deposit file. Lebanon24 notes that the deposit recovery law is not dormant in parliament, but is subject to amendment by the government through a committee formed for this purpose, with the demand for serious treatment by securing funding and capabilities to give rights to their owners after auditing the assets of the state and banks. Kanaan pointed out that numbers are in the government’s possession, and auditing the assets of the state and banks in Lebanon and abroad is the government’s mission, not the parliament’s.
Amnesty Legislation and Institutional Protocol
Beyond financial legislation, Kanaan stated that he did not participate in the vote on the amnesty law because there is a precedent that should not be established, represented by preventing the Minister of Defense, who is concerned with the military institution, from expressing his opinion. He noted this was a precedent that should not have happened.
While clarifying that they are not against amnesty, Kanaan characterized that its approval should have been accompanied by listening to the opinion of the military institution. He concluded that we need, more than ever, to put politics aside, treat each other with respect, and protect our institutions.
Frequently Asked Questions
What is the status of the banking reform law in Lebanon?
According to MP Ibrahim Kanaan, the banking reform law has been approved for the second time following amendments proposed by the Finance and Budget Committee, aside from one article and a single paragraph.
Why is the financial alignment law considered crucial by lawmakers?
Kanaan stated that the core solution to Lebanon’s financial crisis rests within the financial alignment law, noting that deposit recovery is essential to restoring trust in the national economy and banking system.
What concerns were raised regarding the amnesty vote?
Kanaan did not participate in the vote on the amnesty law because the Minister of Defense, who is concerned with the military institution, was prevented from expressing his opinion.
How do you view the balance between international lender requirements and domestic depositor protections in Lebanon’s economic recovery?
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