Salwa Baalbaki wrote in “An-Nahar”:
Secretary General of the Association of Banks in Lebanon, Dr. Fadi Khalaf, believes that restructuring banks should not turn into a process of liquidating the sector, but rather into a means of recapitalizing viable banks and returning them to performing their role in the economy. The gamble for the banking sector is that the rules are clear, losses are specified, and responsibilities are distributed fairly, allowing for the attraction of new capital and rebuilding confidence.
But financial and banking expert Dr. Nassib Gabriel goes beyond the law itself. In his opinion, restructuring the banking sector is not a goal in itself, but rather a means to reactivate banking work and enable commercial banks to return to their primary mission, i.e. financing the Lebanese economy, especially the private sector. He warns against reducing the crisis to its banking or technical dimension, considering that “the banking sector does not operate in a vacuum. Even if the required laws and regulatory systems are in place, it is not possible to build a sound banking sector without a stable economic and institutional environment.”
The main problem, according to Gabriel, is that restoring confidence cannot be achieved through restructuring alone. What is required is to restore confidence in public institutions and the Lebanese economy as a whole, which requires integrated reform that goes beyond the banking sector to security, politics, the judiciary, administration and public finance.
What economic identity does Lebanon want for the future? The choice, in his opinion, must be clear in favor of an economy based on the private sector and individual initiative, accompanied by a more agile and efficient public sector that adopts the rule of law, combats tax and customs evasion and smuggling, and regains its position in the global financial system and regional markets.
Such an economy, according to Gabriel, is the one that can attract investments, capital, technology and companies, and thus create the necessary environment to recapitalize the banking sector. As for the continuation of the shadow economy, the weakness of public services, the lack of transparency, and Lebanon’s remaining on the margins of the global financial system, all of them are factors that undermine the chances of restoring confidence, and Gabriel places the extension of state authority over all Lebanese territory among the basic conditions for achieving this vision, noting that international interest in Lebanon can be transformed into financial and economic support and investments, provided that the country has a clear vision for the next stage.
On the direct banking side, the law of financial regulation and deposit recovery remains the toughest test. The restructuring project and the law approved by the House of Representatives represent the legal and technical side of the treatment, while the most sensitive question remains related to how to distribute losses, sources of liquidity, and mechanisms for returning depositors’ funds.
Gabriel points out that the draft deposit recovery law is still on its legislative path, and its end does not appear to be near, anticipating that this path will not be completed before 2027.
