Ongoing debate: Finance and Budget Committee stalls on financial reform legislation

The Parliamentary Finance and Budget Committee has concluded its meeting without making any significant progress on the proposed Financial Rebalancing and Banking Restructuring Law. A date for the next meeting remains undecided.

However, the Committee head, Ibrahim Kanaan, and its members have received assurances from Finance Minister Youssef Khalil, representatives from the Banque du Liban (BDL), the Banking Control Commission, and the Parliament that efforts are underway to provide concrete figures for discussion.

The discussions revolve around two primary aspects: government revenues and assets, particularly regarding rumors of a deposit recovery fund, and the financial condition of individual banks. The evaluation process that the International Monetary Fund (IMF) had requested for the 14 significant banks has not yet taken place.

Of particular concern is how depositors can benefit from the rumored $100,000 deposit cap should the numbers demanded by the Finance and Budget Committee not materialize.

The issue of banking restructuring is not merely about financial numbers and liquidity but also involves the legal framework of the proposed law. It appears that negotiations between the government and the IMF regarding the legal format of the law are still pending.

In contrast, Deputy Prime Minister Saadeh al-Chami, who did not attend the committee meeting due to his presence abroad, questioned the timing of the demand for detailed figures on bank assets.

Al-Chami argued that if precise asset numbers are needed, it might take up to a year, questioning why this demand has arisen at this moment. 

He further noted that the government and the Banking Control Commission have already provided the Finance Committee with extensive data on the assets of the BDL and commercial banks, including spending in various sectors, particularly subsidies and electricity.

In conclusion, the result is inconclusive, and further discussions are needed. Continuous delays in addressing these critical financial laws are contributing to the erosion of deposits and increased challenges within the Lebanese banking sector and the BDL.