IMF to assess potential changes to Lebanon's bank resolution law

The International Monetary Fund (IMF) will evaluate potential modifications to Lebanon's bank resolution law to ensure they align with international standards, according to the organization's spokeswoman. The IMF praised the law, enacted in August, as a crucial step in reforming Lebanon's banking sector and jumpstarting its economic recovery, which has been hindered by the Israel conflict.

The legislation aims to revamp the banking system, enabling depositors to gradually access their frozen savings. However, implementation may be delayed, as Lebanese President Joseph Aoun has directed the Constitutional Council to review an amendment affecting the central bank's independence and authority.

IMF communications director Julie Kozack stated that the IMF views the bank resolution law, approved by Parliament, as consistent with international standards, highlighting this as a critical criterion. The law is deemed essential as Lebanon seeks a new staff-level agreement with the IMF. In 2022, the government signed an agreement with the IMF following a catastrophic economic collapse caused by years of mismanagement and corruption.

However, the government lagged in implementing the changes. IMF Managing Director Kristalina Georgieva affirmed the fund's commitment to supporting Lebanon's development and the execution of an economic reform agenda during a meeting with Lebanese Prime Minister Nawaf Salam at the fund's headquarters in Washington on Tuesday.