International Monetary Fund staff published an end-of-mission statement following discussions in Beirut with the Lebanese authorities on strengthening the recently formulated bank restructuring strategy and advancing an emerging medium-term fiscal framework aimed at restoring macroeconomic stability and debt sustainability. The mission focused on improvements to the draft Financial Stabilization and Depositor Recovery law, recently approved by Cabinet, to align it with international principles, including respecting the hierarchy of claims so that losses are not allocated to depositors before shareholders or junior creditors. It also stressed that the bank restructuring strategy should be consistent with available liquidity to support the gradual release of deposits and that any required state contribution should not undermine efforts to restore public debt sustainability. Work on amendments to the Bank Resolution Law was discussed as a means to establish an independent, transparent, and effective bank resolution process, while the fiscal framework was presented as critical to support bank restructuring, underpin sovereign debt restructuring, and guide spending commitments alongside well-defined revenue mobilization, including tax policy measures such as a modernised income tax law. IMF staff noted that discussions are ongoing and expressed hope that Parliament will discuss and approve amendments to the Bank Resolution Law in the coming months; the mission will not result in an Executive Board discussion.

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