The financial and economic crisis in Lebanon is unprecedented and requires decisive steps to restore confidence and protect depositors, said Kataeb Political Bureau member and former Economy Minister Alain Hakim, putting forth a detailed blueprint to stabilize the country’s banking sector and revive its economy.

Speaking to This Is Lebanon, Hakim described the situation as “unprecedented,” with the Lebanese pound plummeting to historic lows and bank deposits frozen, leaving citizens uncertain about the safety of their savings. He warned that the International Monetary Fund’s proposed restructuring, which includes replacing existing banks with new institutions, raises fundamental questions about who will bear the losses.

“If the capital of current banks is liquidated, depositors will be the first to absorb the losses,” Hakim said, noting that new banks will not assume the obligations of the existing institutions. “Any solution must first define the state’s share of losses and present an effective funding plan to return deposits over several years, while simultaneously stimulating growth, rebuilding confidence, and normalizing the banking sector.”

Hakim stressed that the state is at the center of the problem.

“The gap between the state and depositors cannot widen further. Responsibility is clear, and rebuilding trust requires protecting deposits and returning them on a defined schedule,” he said.

Hakim, therefore, outlined three pillars for restoring confidence: normalizing day-to-day banking operations, reviving the economic cycle, and re-establishing trust in the Lebanese state.

On relations with international correspondent banks, Hakim warned that these connections take years of transparency, compliance, and mutual trust.

“Removing current banks without a reliable alternative and a clear plan risks severing Lebanon from the global financial system, disrupting commercial and financial transfers that are vital to the economy,” he said.

He emphasized that rehabilitating existing banks is the most effective way to ensure remittances continue to flow and to protect the country’s food, medicine, and private sectors.

Hakim also highlighted the need to restore liquidity and solvency.

“Most Lebanese banks are solvent but lack liquidity. Restoring both is essential to rebuilding confidence. With clear, transparent restructuring, reinforced capital, and new investments, banks can gradually return funds to depositors. Without structural reform, liquidity cannot be safely restored,” he said.

The former minister recommended merging non-viable banks, establishing a stable legal and economic framework, and involving the state in stimulating the economy rather than leaving banks to shoulder all losses.

He further called for implementing a “cash management control” mechanism. Unlike traditional capital controls, it would not only limit withdrawals but also manage banks’ daily liquidity to ensure financial stability.

“This system would set safe monthly withdrawal limits, prevent cash runs, curb inflation, and allow banks to operate normally,” Hakim said. “For example, injecting $11–12 billion under this framework would enable banks to meet urgent cash needs while returning a significant portion of funds to depositors safely and systematically.”

On Lebanon’s broader economic recovery, Hakim stressed that no meaningful revival is possible without unified sovereign decision-making.

“Currently, decisions on peace and war are divided, deterring investors and donor countries. The state must regain control over its territory and the monopoly on weapons. This is essential for stability and to attract Gulf and Arab investment, which is crucial for the economy,” he said, citing Prime Minister Nawaf Salam’s position.

Hakim also criticized the state’s legal and fiscal management.

“The state used depositors’ funds to finance deficits, corruption, and indiscriminate subsidies totaling nearly $20 billion, while ignoring violations. Holding banks or depositors solely responsible is unrealistic. A fair solution requires sharing losses and holding state officials accountable to ensure transparency, governance, and proper management.”

Hakim concluded that any rescue plan must rest on five pillars: normalizing the banking sector, restoring economic activity, rebuilding trust in the state, protecting deposits, and returning liquidity. He stressed that these objectives are inseparable from disarming non-state groups and restoring international confidence, which he called “our fundamental priorities and commitments.”