An International Monetary Fund mission to Lebanon this week discussed improvements needed to a draft law aimed at addressing huge losses in the country's financial system to align it with international principles, the IMF said.
The law aims to address a vast funding shortfall resulting from the collapse of the financial system in 2019 - estimated at $70 billion in 2022 but now believed to be higher. The collapse froze depositors out of their bank accounts, sank the Lebanese currency, and led the state to default on sovereign debt, Reuters reported.
According to Asharq Al-Awsat, the international institution welcomed recent progress but deemed it insufficient to finalize an agreement until the legislation is enacted in its final form.
In a statement, the head of the IMF mission Ernesto Ramirez Rigo said the law recently approved by cabinet was "a first step toward rehabilitating the banking sector and giving depositors gradual access to their deposits".
The Cabinet-approved Financial Stability and Depositors’ Rights Recovery Law was described as an initial step toward banking sector reform and restoring gradual access to deposits. Officials pledged to fast-track the bill’s approval in parliament by the end of next month.
