(Reuters) The International Monetary Fund has welcomed the Lebanese parliament’s passing of amendments to a bank resolution law as a major step, but challenges to implementing the law could further delay recovery for an economy battered by years of financial collapse and the conflict with Israel.
The reforms are among the IMF’s requirements for Lebanon to access funding to bring government debt out of default after decades of profligate spending by the country’s ruling elite, sending the economy into a tailspin in late 2019.
Banks imposed sweeping capital controls, locking depositors out of their savings, and stopped issuing loans.
In January the IMF had demanded changes to the draft rescue law, Lebanon’s Prime Minister Nawaf Salam told Reuters at the time.
Now, the bank resolution law aims to address vast funding shortfalls in the financial system and is among a set of measures that ultimately aim to fix the banking sector and allow depositors who have been frozen out of their savings to gradually recover their money.
