Latest news with #LeaFayad
LBCI
a day ago
- Business
- LBCI
Banking reform law reaches Lebanese Parliament: What it means for depositors
Report by Lea Fayad, English adaptation by Yasmine Jaroudi After years of delays, Lebanon's long-awaited banking reform law has finally reached the Parliament for approval in a general session. The latest draft introduces key amendments that directly impact depositors, particularly those with multiple accounts in different banks. One of the most significant changes guarantees account independence. Under the revised version, if a depositor holds three separate accounts at three different banks, each with $100,000 or more, they would be entitled to reclaim up to $300,000 in total. This marks a sharp departure from the government's original proposal, which would have capped compensation at $100,000 per individual, regardless of the number of accounts held or the banks involved. Another major shift prioritizes individual depositors over public institutions. While the government's previous version gave full repayment priority to public sector deposits, the new draft restores precedence to private depositors seeking to recover their savings. Passing the law is seen as a positive step, but observers note it remains incomplete. The law's actual implementation hinges on the adoption of a separate piece of legislation: the Financial Regularization and Deposit Recovery Law. That law will determine how financial losses are apportioned between the state, the Banque du Liban (BDL), commercial banks, and depositors. This is where the process gets more complex. Finance Minister Yassine Jaber has pledged to submit the financial regularization bill to the Parliament within six months. However, skepticism remains high. Nearly six years have passed since Lebanon's financial collapse began, with successive governments failing to push through a deposit recovery mechanism. Meanwhile, citizens' deposits remain effectively frozen, widely seen as a violation of their rights. For many, unless the upcoming legislation offers a genuine solution to the banking crisis, current efforts may be viewed as little more than political maneuvering ahead of the next parliamentary elections.
LBCI
6 days ago
- Business
- LBCI
Socio-economic impact: Lebanon's post-war collapse
Report by Lea Fayad, English adaptation by Yasmine Jaroudi Is the war in Lebanon over? One thing is certain—the country's economy is still paying the price of the last war, which came after five years of economic and social crisis. According to a new United Nations report titled "The Socio-Economic Impact of the 2024 War on Lebanon," the private sector lost 25% of its jobs during the conflict. Even after the ceasefire, 14% of those jobs remain unfilled. Meanwhile, 15% of businesses have shut down permanently, while another 21% are temporarily closed. Key sectors, including agriculture, industry, and tourism, were severely hit. The ripple effects have been devastating: nearly one million Lebanese, approximately 928,000 people, are living in a state of acute food insecurity. The report warns that even with immediate and comprehensive reforms, Lebanon's economy is projected to reach only 8% of its pre-crisis size by 2030. Resident Representative of the United Nations Development Program (UNDP) in Lebanon, Blerta Aliko, said that without genuine political will and serious reforms, the compounded crisis that began in 2019 and worsened during the 2024 war may become inescapable.
LBCI
04-06-2025
- Business
- LBCI
From scoop to spike: Why your next tub of ice cream may cost more
Report by Lea Fayad, English adaptation by Karine Keuchkerian If ice cream is your go-to comfort when it's hot or you're stressed, brace yourself—prices could soon "melt" your budget. Supermarket ice cream may soon get more expensive due to a sharp increase in the global price of coconut oil, a key ingredient in many brands. Coconut oil helps ice cream maintain its texture and freeze properly. But the pressure isn't just coming from the dessert aisle. Demand for coconut oil is surging worldwide, fueled by its use in food products, cosmetics like shampoos and creams, and even as a biofuel alternative in some countries. This spike has already impacted the prices of other goods such as coffee and cocoa, which are also viewed as commodities for investment.
LBCI
04-06-2025
- Business
- LBCI
IMF challenges Lebanese bank law over unequal payouts and public sector favoritism
Report by Lea Fayad, English adaptation by Mariella Succar If you have three frozen bank accounts in three different Lebanese banks, each holding $100,000 or more, how much can you expect to recover? According to the Lebanese government's proposed bank restructuring plan, a single recovery cap would apply across all your accounts—meaning you would be eligible to reclaim a set amount from only one account. The International Monetary Fund (IMF) takes a different view. It recommends that the compensation cap apply to each account, not a consolidated total. If the government decides to reimburse $100,000, you will receive just that amount under its plan—while the IMF believes you should get $300,000. In its feedback, the IMF criticized the government's approach of aggregating accounts across banks, calling it 'not adequate.' The fund argues this method fails to meet international standards and undermines fairness. The IMF also raised concerns over the government's proposal to repay public sector deposits ahead of those of private depositors. Such preferential treatment, the fund warned, would violate global norms and disproportionately disadvantage individual account holders. Another key recommendation from the IMF is that the bank restructuring law must take precedence over all other legislation in Lebanon. Without that, the fund cautioned, the country risks facing legal and procedural challenges when the law is implemented. These are just a few of the 20 observations submitted by the IMF regarding the draft bank restructuring law, which was approved by the Cabinet and is now under review by Parliament. A subcommittee of the Finance and Budget Committee is currently studying the law in detail. The IMF's comments also addressed the proposed structure of the Higher Banking Commission, the role of Lebanon's Banking Control Commission, and the technical processes for assessing the financial standing of banks. The fund shared its observations directly with the Finance Committee, emphasizing that these changes are essential to restoring confidence in the banking system and ensuring long-term stability in Lebanon's financial sector. It remains to be seen whether lawmakers will incorporate the recommended amendments and whether the IMF will ultimately approve a revised version of the law—or if Lebanon will still face a long road to financial recovery.
LBCI
24-04-2025
- Business
- LBCI
Reforms unlocked with banking secrecy lift: Lebanon expands access to bank records to trace crisis roots
Report by Lea Fayad, English adaptation by Yasmine Jaroudi Lebanon's Parliament passed key amendments to the banking secrecy law with an overwhelming majority of 87 votes in a general session, marking a significant step in the country's financial reform agenda. The new law allows for broader access to banking information, aiming to hold accountable those who benefited from financial engineering schemes, capital flight, or subsidy misuse. The updated legislation introduces retroactive application over 10 years, enabling authorities to investigate bank accounts dating back to 2015—a year widely seen as the beginning of Lebanon's financial collapse, notably due to questionable central bank policies. The amendments do not give blanket authority to lift banking secrecy. Only seven official authorities are permitted to request access to bank accounts: previously allowed were the judiciary, the Special Investigation Commission at the Banque du Liban (BDL), the Finance Ministry's tax administration, and the National Anti-Corruption Commission. Added to the list are the BDL itself, the Banking Control Commission, and the National Deposit Guarantee Institution. Under the revised law, these seven official bodies will now be authorized to directly request detailed information from banks regarding suspect accounts and their beneficiaries. An additional provision introduced during the session allows resident auditors and audit firms to access this information upon request from the International Monetary Fund (IMF), a move designed to meet IMF conditions tied to Lebanon's broader reform commitments. Though the law's retroactivity was set to 2015, some MPs—particularly from the Free Patriotic Movement (FPM)—voiced objections, calling for the timeline to stretch back to the early 1990s when they argued the roots of Lebanon's financial crisis began. The objection was not adopted. Legal sources say information obtained under the new law will be referred to the appropriate judicial authorities, such as the Financial Public Prosecutor's Office, to take necessary legal measures. The law will officially take effect upon publication in the official gazette this coming Thursday. If needed, the Cabinet may issue further decrees—on the recommendation of the Finance Minister and in consultation with BDL—without delaying the law's implementation. Seen as a cornerstone of Lebanon's financial reform package, the amended law is tightly linked to the planned banking sector restructuring law and the long-awaited financial gap law. It is expected to aid in distinguishing between legitimate and illicit deposits as part of the broader effort to return stolen or misused funds. Yet, the accurate measure of success will lie in execution.
