Lebanese Cabinet Approves Financial Restructuring Law

On December 26, the Lebanese cabinet approved a draft financial restructuring law with a 13-9 vote, marking a significant step in addressing the country's ongoing financial crisis. The law aims to distribute approximately $70 billion in losses incurred since Lebanon's 2019 financial collapse among the state, the Central Bank of Lebanon, commercial banks, and depositors. This measure is seen as a crucial requirement by the International Monetary Fund (IMF) for Lebanon to access much-needed international funding.

Prime Minister Nawaf Salam nawaf salamdefended the law, stating it is the first accountability-focused restructuring mechanism introduced in six years. The law not only seeks to distribute losses but also provides a framework for depositors to gradually recover their frozen savings. Despite its significance, the law faced substantial opposition from ministers across Lebanon's political spectrum, as well as criticism from the Association of Banks in Lebanon.