- An IMF mission visited Lebanon from November 10-13 to further advance discussions on the authorities' banking sector restructuring strategy. Engagement is expected to continue in the period ahead.
- Progress was made although further work is needed to reach agreement on an effective and durable strategy for restructuring Lebanon's banking sector.
- The implementation of the Bank Resolution Law (BRL) alongside the Financial Stabilization and Deposits Recovery Law (FSDR), once adopted, is essential to restore financial stability and maximize deposits recovery.
Beirut, Lebanon: An International Monetary Fund (IMF) staff team, led by Ernesto Ramirez Rigo, visited Beirut, Lebanon, from November 10 to 13, to continue discussions on the banking sector restructuring strategy.
At the end of the mission, Mr. Ramirez Rigo made the following statement:
"Since the September staff visit, the authorities and IMF staff have had continued discussions on key elements of the banking sector strategy, with a focus on aligning the draft FSDR, currently before Parliament, with international standards. During the mission, there was progress in further clarifying the approaches under consideration by the Banque du Liban (BdL) and the Government.
"However, further work is needed to reach an agreement on a strategy for an effective and durable restructuring of Lebanon's banking sector, leading to a sound and resilient system. In particular, the BRL should be applied in all cases as it is essential to support a transparent and predictable bank resolution and liquidation process. Further discussions are also needed to set criteria to maximize deposit repayments while ensuring consistency with the liquidity positions of BdL and the banking sector as well as public debt sustainability and the restoration of BdL's solvency. It is also critical that the FSDR upholds the hierarchy of claims in the allocation of losses, thereby maximizing protection for depositors.
"The mission looks forward to continuing the engagement with the authorities to make further progress on these fronts in the coming weeks and remains fully committed to supporting Lebanon in its efforts to design and implement a comprehensive economic reform program, in line with the IMF's policies and mandate.
"The IMF team would also like to thank the Lebanese authorities for productive discussions and their hospitality."
