Lebanon’s central bank governor has expressed some reservations over a draft law allowing depositors to gradually recover funds frozen in the banking system since a financial collapse in 2019, a move critical to reviving the economy.
In a statement on Tuesday, Karim Souaid described the proposed timetable for the cash component of deposit repayments as “somewhat ambitious”.
Prime Minister Nawaf Salam on Monday urged ministers to swiftly approve the draft legislation.
Souaid suggested it may be adjusted without hindering the depositors’ rights guarantee “regular, uninterrupted, and complete payments over time”.
He also urged the cabinet to conduct a careful review of the draft law, calling for clarifications to ensure fairness and credibility before it is submitted to parliament.
Central bank seeks law revisions
The central bank governor said the draft required further refinement, including clearer provisions to guarantee equitable treatment of depositors and to reinforce the state’s commitments under the law.
The 2019 financial collapse – the result of decades of unsustainable financial policies, waste and corruption – led the state to default on its sovereign debt and sank the Lebanese pound.
The draft law marks the first time Beirut has put forward legislation aimed at addressing a vast funding shortfall – estimated at US$70 billion in 2022, but now believed to be higher.
The cabinet discussed the law earlier in the week and is set to continue discussions on Friday.
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