Lebanon's Path to Financial Recovery: Ambitious Draft Law Unveiled

Lebanon introduces a draft law to mitigate its prolonged financial crisis in alignment with IMF standards. The proposal aims to address funding gaps and aid depositors recovering savings. It requires parliament's approval and includes asset-backed securities for larger deposits and a repatriation clause for funds transferred abroad.

In a bid to resolve its prolonged financial turmoil, Lebanon has put forward a draft law designed to address the extensive funding shortfall that has plagued its financial system for six years. Prime Minister Nawaf Salam emphasized the plan aligns with International Monetary Fund standards, aiming to restore confidence in the beleaguered economy.

The draft law, scheduled for cabinet discussion on Monday, is positioned as Lebanon's maiden legislative effort to address a crisis that unfolded in 2019, marked by long-standing corruption and poor fiscal strategies. It lays out a repayment scheme allowing small depositors to recover funds through gradual installments.

Larger deposits will be refunded via securities issued by the central bank, with specific terms for different deposit sizes. The law also seeks to bring back substantial outward money transfers through new taxation measures. Salam acknowledged its imperfections, but stressed it's a significant step toward redressing the crisis.

(With inputs from agencies.)