A widening wave of objections in Lebanon to the draft “financial gap” bill has exposed the hurdles facing its passage in parliament.
Prepared by a ministerial and legal committee chaired by Prime Minister Nawaf Salam, the bill has drawn resistance from influential political and sectoral actors, bolstering the opposition voiced by depositors’ associations and the banking lobby.
Conflicting ministerial positions ahead of Monday’s special cabinet session to review the final draft underscore the sharp disputes likely to intensify once the bill is formally sent to parliament, a senior financial official told Asharq Al-Awsat.
With parliamentary elections due next spring, candidates are wary of confronting voters or powerful interest groups.
According to the government’s forthcoming brief, the bill marks the end of years of disorder and the start of a clear path to restore rights, protect social stability, and rebuild confidence in the financial system after six years of paralysis, silent erosion of deposits, and crisis mismanagement.
It is framed not as a narrow technical fix, but as a strategic shift, from denying losses and letting them fall haphazardly, to acknowledging and organizing them within an enforceable legal framework.
The government argues the plan would protect about 85% of depositors by enabling access to a guaranteed portion of savings, up to $100,000 over four years, while preserving the nominal value of all deposits via central bank–guaranteed bonds maturing in 10, 15, and 20 years.
Banks, however, have openly declared their “fundamental reservations and strong objection” to the bill on financial regularization and deposit treatment.
Professional associations and unions have joined depositors’ groups in opposing proposals they say would load the bulk of losses onto depositors, either through direct haircuts or by stretching repayment over one to two decades.
The Beirut Order of Engineers added its voice, warning that the near-final draft manages collapse rather than delivers reform, distributing losses unfairly at the expense of depositors and productive sectors, and failing to explicitly protect union funds.
Legal objections have also surfaced over provisions with retroactive effect, taxes, levies, and accounting adjustments applied to transfers made after the crisis erupted in autumn 2019, as well as to past deposit returns.
Banks say such measures constitute an unjustified infringement of rights and lack sound legal and financial grounding or precedent.
The financial official noted that these retroactive elements could be challenged before the State Council, as they contradict the principle that laws apply only after promulgation. Most transactions, he added, were conducted under then-valid laws and central bank approvals.
By contrast, previous governments compelled the central bank to spend more than $11 billion on poorly controlled subsidies, much of which was smuggled abroad, notably to Syrian markets.
Banks insist that any credible solution must begin with a precise, transparent assessment of the financial gap at the Central Bank, based on audited, unified accounts and realistic financial modeling.
They argue that the plan effectively wipes out banks’ capital and - under loss-sharing rules set by Law 23/2025 - ultimately hits depositors, while the state avoids settling its debts to the central bank or covering its balance-sheet shortfall.
