After years of political paralysis and financial collapse, Lebanon’s government is slowly beginning to show signs of movement, taking small steps that many citizens hope will bring much-needed relief from a cascade of crises, particularly the devastating economic meltdown that wiped out billions in bank deposits.

A glimmer of optimism emerged last Saturday when the Cabinet approved a draft banking reform law. The legislation is being touted as a potential turning point, with the aim of restoring public trust in both the banking sector and the State itself.

But experts caution against premature optimism. In an economic analysis of the draft law, risk strategist and economist Mohammad Fheili told Kataeb.org that while the Cabinet’s approval marks the beginning of the banking sector’s return to serving the Lebanese economy, the draft falls significantly short of being a comprehensive restructuring plan.

“It doesn’t address the issues of depositors or their lost savings. It doesn’t touch the financial gap,” Fheili said. “Rather, it is a sincere attempt to lay down the legal and regulatory groundwork to bring back viable banks that have been reluctant to resume operations for the past three years.”

Fheili also expressed skepticism over the government’s apparent attempt to use the law to advance negotiations with the International Monetary Fund (IMF).

“The government is promoting something that doesn’t align with the IMF’s work model,” he explained. “The IMF negotiates in Lebanon, at a table that includes the President, the Prime Minister, and the Finance Minister—not in Washington.”

According to Fahili, the IMF only holds biannual diplomatic meetings in Washington, around which side meetings may occur, but those are neither formal negotiations nor platforms for developing concrete solutions.

“Real solutions must be agreed upon in Lebanon first,” he said. “Only then are they presented to the IMF Executive Board, which decides whether to approve technical or financial assistance packages.”

“I believe the government is simply trying to send positive signals to the international community ahead of meetings in Washington, claiming it has met some reform milestones. But realistically, nothing substantive can be completed by April 21.”

The legislative process for the banking reform law still faces numerous hurdles, Fheili pointed out.

“Now that the draft has left the Cabinet, it must go to Parliament’s General Secretariat, then be reviewed by the Finance and Budget Committee, followed by the Administration and Justice Committee,” he explained. “If they choose to fast-track it, it might go to the joint committees—which would mean rushing the law through without sufficient scrutiny.”

Fheili also pointed to Lebanon’s history of passing laws that never make it off the page.

“In 2015, Parliament passed a series of ‘urgent’ laws under what was called the ‘legislation of necessity,’ including Law 44/2015—a good law, but one that lacked an implementation mechanism,” he recalled. “As a result, Lebanon was placed on the Financial Action Task Force’s grey list.”

He cited a similar pattern in 2022, when Parliament passed strong amendments to the banking secrecy law.

“Those were excellent changes, but the executive framework was never established. Now, the international community is demanding a new look at the law,” he said. “Everything proposed by the Prime Minister since 2022—aside from the retroactive clause, which only needed a few tweaks—lacked the necessary regulatory structure. That failure has brought us back to square one in 2025.”

“We don’t need more laws. We need the will to act. What we need is action on the ground, not just in Parliament or the Cabinet. We need to revive State institutions, reenergize the Banking Control Commission, and ensure that government bodies are delivering real services to citizens. And above all, we must implement the laws that have already been passed," Fheili concluded. 

This is an English adaptation of an Arabic article by Julie Majdalani.