Time is running out: Lebanon faces IMF deadline to approve financial reform laws

Report by Lea Fayad, English adaptation by Yasmine Jaroudi 

With just days remaining before Lebanon's official delegation heads to Washington for the April 21 IMF Spring Meetings, a visiting delegation from the International Monetary Fund (IMF) has delivered a clear message to Beirut: the time for delay is over.

During meetings with Lebanese officials, the IMF delegation emphasized the urgent need for Parliament to pass two key financial reform bills before the upcoming meetings in Washington. These legislative requirements had also been stressed earlier by Morgan Ortagus, the U.S. Deputy Envoy. 

The first law concerns amendments to Lebanon's banking secrecy legislation, which has already been approved by the government and sent to Parliament through a presidential decree. The second, more complex draft law pertains to the restructuring and regulation of Lebanon's banking sector.

While the Cabinet was expected to approve the banking restructuring law in its Tuesday session, deliberations remain unfinished. Only the preliminary justifications for the law were passed, with a ministerial committee of five—headed by Minister Tarek Mitri—formed to continue its review.

This draft legislation outlines the criteria for evaluating which banks can continue operating, which must increase capital, and which will be liquidated. It is also linked to a third law, still in development, concerning the financial gap—defining total losses and laying out a mechanism for deposit recovery. 

However, completion of the financial gap law is not required before the IMF meetings.

Still, some ministers have voiced reservations, arguing that separating restructuring from the determination of banking losses is problematic, as the numbers could fundamentally alter the reform framework.

If the Cabinet finalizes the bank restructuring law in the coming days, will Parliament have enough time to approve it, along with the banking secrecy reform?

Sources close to Parliament Speaker Nabih Berri say he is prepared to call a general session as soon as the Cabinet forwards the draft, provided it is also passed in the joint parliamentary committees.

The spotlight in the coming days will be on the Cabinet to finalize the banking reform law, and on Parliament to push both laws through before Lebanon's delegation departs for Washington.

Time is running out.