Jaber Concludes IMF Talks: Small Committee to Finalize Financial Gap Law

Finance Minister Yassine Jaber, heading the Lebanese negotiating delegation, concluded a round of talks with the International Monetary Fund (IMF) mission, joined by Economy and Trade Minister Amer Bsat, Banque du Liban Governor Karim Saeed, Director General of Finance George Maawad, and representatives from relevant Lebanese entities including the Presidency and Government, as well as specialized experts.

The meetings addressed the draft financial gap law, ways to address the banking crisis, and the restoration of depositors' funds.

Jaber

After the meeting, Jaber stated that the talks had made progress in narrowing differences among the various parties, amidst discussions characterized by frankness and mutual understanding. He affirmed that "efforts are focused on addressing the banking insolvency that has persisted for seven years."

He quoted the head of the IMF mission describing the Lebanese situation as "an unprecedented case of a banking crisis that remained unaddressed throughout this period."

He announced an agreement to "form a small committee to follow up on meetings, aiming to complete the required formulas before the end of the year, and to go to Parliament with a unified position and formula that helps pass the financial gap law," expressing his hope "to achieve a law ready for implementation before next March."

He also expressed his aspiration to "make progress enabling the conclusion of an agreement on a program with the IMF and signing it during the first quarter of next year, and by its end at the latest." He noted that "the Fund will issue a statement regarding the results of the talks," expecting its release this afternoon following a technical delay related to electronic correspondence.

Jaber thanked the Minister of Economy and Trade for his participation and efforts, and the Governor of Banque du Liban, his deputies, and the working team for their cooperation, noting that "the Central Bank provides the basic figures and calculations upon which the discussion relies, particularly those related to financial capabilities and repayment capacity."

In response to a question about how deposits would be restored, Jaber clarified that "details are still being worked on," affirming that "the solution is based on two fundamental goals: restoring banking operations to support economic development and enhance confidence in banks, and beginning the return of depositors' funds."

He said: "A vast majority of depositors, possibly reaching around 90 percent, will be able to receive their funds in cash or in 'fresh' dollars during the first phase, while the treatment of remaining deposits involves bonds issued by Banque du Liban to be paid out in later stages."

He stressed that "the discussion focuses on ensuring the law's executability and the availability of necessary funds for it."

Regarding loss distribution, Jaber reiterated the previously announced hierarchy, stating: first the State, then Banque du Liban, then banks, and finally depositors. He affirmed that "most depositors will recover all their funds, with variations in timelines and payment mechanisms," noting that "paying all funds to all depositors at once is not possible in light of what Lebanon has experienced."

In response to a question about amounts previously withdrawn by depositors at exchange rates lower than the actual dollar rate, Jaber pointed to "the difficulty of addressing all previous losses," affirming that "the solution will be within the limits of available resources of the State and Banque du Liban."

Bsat

For his part, Minister of Economy and Trade Amer Bsat described the discussions as "very positive," noting progress and agreement at the principled level, and moving to examine the technical details necessary to complete the solution.

He clarified that "the topics requiring further work have become clear, and the small committee will undertake completing them, in parallel with providing the data required by the IMF, seeking to finish the details before the end of the year and complete the legislative formula to present it to Parliament."

Bsat explained that the committee includes three parties: the government represented by its experts and with the participation of concerned ministers when needed, Banque du Liban represented by the governor and his team, and the International Monetary Fund.