The Secretary-General of the Association of Banks in Lebanon (ABL), Dr. Fadi Khalaf, has cautioned that any financial restructuring confined to the banking sector is likely to fail unless accompanied by comprehensive state reform.
In his editorial for the ABL’s November report, published Monday, Khalaf emphasized that Lebanon’s current crisis is systemic and cannot be addressed without tackling its structural causes, including decades of unsustainable public spending and unviable fiscal policies.
“Placing the bulk of the burden on the banking sector, while the state – primarily responsible for the collapse – contributes only symbolically, risks perpetuating temporary solutions and delaying recovery,” Khalaf said. He stressed that the ongoing legislation aimed at addressing Lebanon’s financial gap must clearly define the responsibilities of each party, the contributions of the state and the Central Bank (BDL), and the untouchable rights of depositors.
Khalaf also highlighted the banking sector’s commitment to rebuilding Lebanon’s financial system through recapitalization, increased transparency, and modernization to align with the digital economy. However, he warned that these efforts alone would be insufficient without parallel structural reforms of the state.
“The real measure of reform is not how many banking laws are passed but the extent to which a comprehensive national plan – shared by public authorities and the private sector – is implemented based on realism, fairness, and shared responsibility,” Khalaf noted.
He argued that any attempt to restore a strong banking sector on the foundation of a weak public financial system is doomed. “Sustainable trust cannot be rebuilt without bold, simultaneous reforms of the public sector alongside the restructuring of banks,” he wrote.
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