Finance Minister Yassine Jaber’s recent statements stand out for his comparison of the Lebanese financial crisis with those in countries such as Greece, Cyprus, and Portugal. In this comparison, he is once again off the mark.
In fact, Cyprus experienced only a conventional banking crisis, while Greece and Portugal faced financial crises centered on public debt. Consequently, none of these crises were systemic, whereas Lebanon is hit squarely by a systemic crisis, as Jaber himself has acknowledged. Such a crisis requires exceptional laws and measures, since the entities at the heart of the problem are none other than the state and the Banque du Liban (BDL). This situation subsequently affected the banks, triggering their liquidity crisis—not the other way around.
All proposals put forward today require postponing the adoption of the law, allowing for transparent and constructive negotiations. These discussions must hold the state and the Banque du Liban (BDL) accountable and require them to make a genuine financial contribution to restore deposits while avoiding any measures that would undermine the banking sector or jeopardize Lebanon’s economic recovery.
Any solution to the financial crisis must involve accountability on the part of the state. Lebanon’s systemic collapse is the result of decades of mismanagement, flawed financial policies, and the misuse of public resources, which have weakened the banking sector and eroded citizens’ trust.
The state therefore bears both legal and moral responsibility to recapitalize the BDL. Article 113 of the Code of Currency and Credit is clear on this point, providing for compensation of losses resulting from financial and monetary policies. Failing to implement this provision would only prolong the crisis, exacerbate inequalities, and further undermine the legitimacy of institutions.
Public assets represent an opportunity to restore depositors’ rights. The state and the BDL have a real ability to use their public and quasi-sovereign assets to meet obligations to depositors, in accordance with legal frameworks and principles of equity, in order to restore financial stability.
Shifting the entire burden of costs onto the banking sector would effectively wipe out its capital and result, de facto, in the loss of deposits. Yet a healthy banking sector is essential for Lebanon’s economic recovery. A viable banking sector with genuine financial strength is necessary to restart the economic cycle, create jobs, and restore confidence.
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