The governor of the Central Bank of Lebanon has set out his position on the draft Financial Stabilization and Deposits Repayment Act, supporting its overall structure while calling for changes to ensure a fair and workable allocation of losses. The draft would eliminate irregular claims, divide deposits into small, large and very large categories, provide repayments through cash and asset-backed securities within available liquidity, and allocate responsibilities among the state, the central bank and commercial banks. The governor called for the state’s contribution to be expressly defined, quantifiable, legally binding and subject to a credible timetable. He also warned that the proposed schedule for cash repayments may be too ambitious and could need adjustment without reducing depositors’ legal rights. Any treatment of banks should remove irregular claims from balance sheets and apply the hierarchy of claims before systematically depleting equity capital, which the governor said would harm depositors, credit intermediation and economic recovery. The governor recommended that the Cabinet strengthen and clarify the draft to improve fairness, financial credibility and enforceability before submitting it to Parliament.
Central Bank of Lebanon2025-12-30
Central Bank of Lebanon governor backs draft deposit repayment law but seeks stronger state commitments and bank capital safeguards
The Central Bank of Lebanon governor supports the overall structure of the draft deposit repayment law but has called for clearer, binding and time-bound state commitments. He also urged a realistic cash repayment schedule and safeguards against depleting banks’ equity before irregular claims are removed and the hierarchy of claims is applied. The Cabinet should revise the draft before submitting it to Parliament.