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Finance Minister Yassine Jaber made reassuring remarks regarding negotiations with the International Monetary Fund (IMF) following an extensive meeting held at the Ministry of Finance with the IMF mission. During the meeting, Jaber affirmed that the elimination or partial deduction of bank deposits is a sovereign and national decision, emphasizing that the very concept is misguided. The key issue today is developing a plan for the restitution of these deposits rather than canceling them. This principle aligns with the inaugural speech of President General Joseph Aoun and the repeated statements of Parliament Speaker Nabih Berri, who has consistently emphasized the sacred nature of deposits, which must remain untouched.

It is widely acknowledged that it is impossible to return all deposits overnight, as no banking system in the world can refund all depositors simultaneously. The IMF has expressed its support for a plan aimed at assisting small depositors – who constitute 84% of bank clients – by scheduling the repayment of all deposits progressively, without discrimination between Lebanese, foreign or Arab depositors. All depositors, regardless of nationality, must be treated equally.

Minister Jaber’s approach to IMF negotiations differs significantly from that of the previous government’s negotiators. Those officials had attempted to convince the IMF that writing off deposits was necessary, a proposal that was incorporated into the former government’s plan. However, that plan was rejected by the State Council, which suspended a “project” aimed at annulling the commitments of the Banque du Liban (BDL) to commercial banks – commitments amounting to approximately $70 billion, which are, in fact, the deposits of account holders.

Najib Mikati’s plan then collapsed, causing the preliminary agreement with the IMF to fall through. Jaber explicitly stated, “When this issue was raised in 2020 under Hassan Diab’s government and later under Najib Mikati’s government, I was among the first to oppose it and warn against the disastrous consequences of such an approach.”

The meeting held today at the Ministry of Finance marked the conclusion of the IMF mission’s visit to Lebanon, led by Ernesto Ramirez Rigo. The mission presented its assessment of the situation after discussions with Lebanon’s three top officials, relevant ministers, and specialized experts and directors from the Ministry of Finance.

Unexpectedly, the scheduled meeting between the Association of Banks and the IMF mission was postponed at the IMF’s request for technical reasons. The Association had already prepared responses to questions previously sent by the IMF mission, which were to be discussed during the meeting.

Alongside Minister Jaber, the meeting at the Ministry of Finance was attended by Economy Minister Amer Bisat, interim BDL Governor Wassim Mansouri, several officials and advisors, as well as the IMF representative in Lebanon, Frederico Lima, and the IMF’s technical team.

According to Ministry of Finance sources, the top priorities are creating a deposit restitution plan, restructuring the banking sector, and adopting a comprehensive reform program, which includes enacting necessary legislation, particularly amendments to the banking secrecy law.

The IMF mission emphasized the importance of adopting a law on banking restructuring, revising the banking secrecy law, and making necessary appointments within regulatory bodies. It granted Lebanon some time to finalize a detailed study to better assess the extent of the financial gap and distribute losses accordingly.

Another key IMF priority is appointing a new BDL governor based on clearly defined criteria. If such an appointment takes place, a new IMF mission could visit Lebanon soon. Otherwise, discussions may be postponed to the IMF and World Bank’s Spring Meetings, scheduled for April in Washington.

In the coming weeks, the Lebanese government is expected to announce the composition of its official negotiating team, which will include the future BDL governor. The aim is to reach a new staff-level agreement with the IMF and establish a full-fledged program before the summer, provided discussions progress in the right direction.