Lebanon adopts draft banking law

Lebanon has adopted a draft law on restructuring its banking sector, a condition for unlocking international aid to help it emerge from an economic crisis it has suffered since 2019.

"It is the first time a (Lebanese) government has approved a bill of this kind," Information Minister Paul Morcos said after a cabinet meeting.

"This draft law has been, and remains, a demand of both legal experts and international institutions keen on helping Lebanon."

In February, the International Monetary Fund said it was open to a new loan agreement with Beirut following discussions with recently appointed Finance Minister Yassine Jaber.

"In just a few weeks, since adopting the banking secrecy lifting bill, we have accomplished a series of necessary reforms for Lebanon," Morcos said, adding that these were "in line with the requirements of the agreement with the IMF."

The Office of the United Nations Special Coordinator for Lebanon (UNSCOL) welcomed Saturday's move.

"The two draft banking laws adopted by #Lebanon’s cabinet are further signs of the Government's commitment to the reform and strengthening of the State," UNSCOL posted on X.

"This positive momentum must continue in parliament and of course, later, in practice."

Morcos said: "A third step will follow these two measures in the near future: the development of a bill aimed at addressing the financial deficit."

Lebanese officials including new central bank governor Karim Souaid are due to meet IMF representatives later this month at a World Bank meeting in Washington.

Lebanon's economic crash since 2019 has seen the Lebanese pound lose most of its value against the U.S. dollar and pushed much of the population into poverty, with ordinary people locked out of their savings.

The international community has long demanded major fiscal reforms to unlock billions of dollars in international aid to restart the Lebanese economy in the wake of the crisis, blamed on mismanagement and corruption.