Lebanon has taken significant steps to address its prolonged financial crisis by enacting a comprehensive banking reform law and appointing a new central bank governor. These measures aim to restore confidence in the country’s financial system and align with International Monetary Fund (IMF) requirements.
Comprehensive Banking Reform Law
In April 2025, the Lebanese cabinet approved a 39-clause banking reform law designed to restructure the banking sector and protect depositors, particularly those with small accounts. The legislation includes provisions for bank recapitalization, potential mergers, and enhanced regulatory oversight. It also addresses the need for transparency and accountability within the financial system.
Appointment of New Central Bank Governor
Karim A. Souaid was appointed as the new governor of the Banque du Liban (BdL) in March 2025. With a background in private equity and banking governance, Souaid brings extensive experience to the role. Upon taking office on April 4, 2025, he pledged to combat money laundering and terrorism financing, restructure the banking sector, and prioritize the return of depositor funds. Souaid emphasized the importance of the central bank operating independently from political influence.
Amendments to Banking Secrecy Laws
In a move to enhance financial transparency, Lebanon’s Parliament approved significant amendments to the country’s banking secrecy laws in April 2025. The changes grant the Banking Control Commission authority to access bank account data, including account holders’ names, with retroactive effect for the past ten years. This measure aims to facilitate investigations into financial crimes such as corruption, money laundering, and tax evasion. The amendments align with IMF conditions for financial assistance and are intended to unlock much-needed international support.
Implications and Future Outlook
The enactment of the banking reform law and the appointment of a new central bank governor represent critical steps toward stabilizing Lebanon’s financial system. By addressing structural issues and enhancing transparency, the country aims to restore confidence among depositors and international stakeholders. The success of these reforms will depend on effective implementation and continued commitment to financial and institutional integrity.
