Parliamentary Finance Committee Sets Deadline for Bank Reform Law Amendments

The chairman of the Finance and Budget Committee declared that next Thursday is the final deadline for the committee to receive any remarks on the bank reform law, emphasizing that comments or amendments should not be submitted daily. He also requested that the government and the Central Bank send the agreed-upon wording from their meeting held 48 hours earlier regarding disputed articles in the bank reform law and the IMF's position on them.

The Finance Committee convened under the chairmanship of Kanaan, with the attendance of Minister of Finance Yassin Jaber, Minister of Justice Adel Nassar, Minister of Economy Amer Bassat, Central Bank Governor Karim Said, and deputies including Ali Fayyad, George Adwan, Jihad Al-Samad, Alain Aoun, Raji Al-Saad, Ihab Matar, Hassan Fadlallah, Michel Mouawad, Ghada Ayoub, Ali Hassan Khalil, Faisal Al-Sayegh, Ghassan Hasbani, Fouad Makhzoumi, Adnan Traboulsi, Salim Aoun, Cesar Abi Khalil, Jamil Al-Sayyed, Paula Yacoubian, Melhem Khalaf, Marwan Hamadeh, Ghazi Zaiter, Ayoub Hamid, Wadih Al-Sadiq, Razi Al-Hajj, Amin Sherri, Ibrahim Mneimneh, Bilal Abdullah, Sajee Attieh, Mohammad Suleiman, Michel Al-Dweihi, Mark Dou, and Mohammad Khawaja.

Also present were the financial advisor to the Minister of Finance, Samir Hammoud, and the Director of Legal Affairs at the Central Bank, Samer Lisha.

After the session, Kanaan stated that the meeting was dedicated to a new draft law amending the bank reform law published in the official gazette. He clarified that the bank restructuring law was enacted on August 14, 2025, following three months of in-depth study by the Finance and Budget Committee in cooperation with the IMF, the Central Bank, and the Ministry of Finance, which had differing views on some articles. The committee reached wording acceptable to all parties, meeting 90% of the IMF's requirements and fully satisfying the Central Bank and government. After the law's enactment on August 14, 2025, several deputies filed appeals before the Constitutional Council, which annulled some articles but upheld the bank sector reform law in Lebanon.

Kanaan added that the IMF later requested additional amendments to the new law, which the government submitted to Parliament at the end of 2025 and early 2026. The Finance Committee convened in February 2026 to review and approve amendments to draft law number 1992, which modifies the existing law number 23. During this session, the Minister of Finance informed the committee of a new letter from the IMF requesting further amendments and asking to withdraw the current draft and submit another. To avoid a back-and-forth between the government and Parliament and accusations of negligence, the committee requested that the IMF's demands be submitted in writing within one week to finalize the work.

The requested amendments from the IMF arrived only at the beginning of this month, but as a new draft law. During today's session, it became clear that the Central Bank had reservations about the new wording, particularly concerning its independence, and noted overlapping authorities in articles 3 and 13 between the High Banking Authority and the Central Council, which undermines oversight and accountability.

Kanaan noted a positive development: a meeting held at the government palace 48 hours earlier, as reported by the Minister of Finance and the Central Bank Governor, resulted in an agreement on new wording for articles 3 and 13. However, it is not yet known if the IMF has approved this wording. The Finance Committee requested to receive the new wording within a week, along with the IMF's approval and other IMF demands, to determine what is needed to finalize the agreement with the IMF and to consider other government proposals unrelated to the IMF.

He emphasized the necessity for the committee to obtain a comparison table showing the approved law against the proposed 28 amendments, which should have been submitted to Parliament along with the law. The Minister of Finance provided this comparison table during the session.

Kanaan mentioned that some ministers or financial authorities in the government might have new remarks. The final deadline for submitting comments is 48 hours before next Thursday's session; otherwise, no further remarks will be considered. He stressed the importance of legislative stability, stating that a state seeking trust in its financial, banking, and monetary systems must maintain consistent legislation, not daily amendments to fundamental laws like the bank reform law.

He also referred to another important law concerning the financial gap and deposit recovery, which the government sent to the Finance Committee and which he scheduled for discussion. The IMF has expressed reservations about this law, and the government is revising it following opposition from unions and depositors' associations. According to the Minister of Finance, the law on the financial gap and deposit recovery is being redrafted because, as Kanaan has repeatedly warned since 2020, the law should focus on addressing and recovering depositors' funds, not writing them off.

Kanaan declined to discuss the wording of the financial gap law today but cited an example: the cost of the $100,000 deposit coverage mentioned in the law amounts to $22 billion, while the bonds to be paid by the Central Bank and banks total $14 to $15 billion. He stated the need to understand how these amounts will be secured and whether they will actually be paid, or if Lebanon will face another payment halt and default, plunging depositors and the public and private sectors into a new crisis.

He confirmed that the Finance Committee expects the government to present a fair and realistic draft law for deposit recovery, avoiding evasion or passing responsibility to Parliament to manage relations with depositors, the Central Bank, and the IMF. He concluded that exceptional circumstances require responsible handling.