US welcomes gap law approval, govt. 'reform steps'

The United States Embassy in Beirut said Wednesday that it welcomes the reform steps undertaken by Prime Minister Nawaf Salam's government, including the Cabinet’s approval of the gap law.

In a statement, the embassy said the gap law would help restore the confidence of international financial institutions, including the World Bank and the International Monetary Fund, in the Lebanese economy and support its recovery.

"These reforms are considered important steps toward restoring confidence in the Lebanese banking system, and positive steps forward that serve Lebanon’s long-term interests, and help attract international investments," the statement said.

Cabinet passed last month the long-awaited banking draft bill that would distribute losses from the 2019 economic crisis amid objections from nine ministers and modest protests.

The law stipulates that each of the state, the central bank, commercial banks and depositors will share the losses accrued as a result of the financial crisis.

Depositors, who lost access to their funds after the crisis, will be able to retrieve all their money, with a limit of $100,000, over the course of four years. The wealthiest depositors will see the remainder of their money compensated by asset-backed securities.

The draft law is a key demand from the international community, which has conditioned economic aid to Lebanon on financial reforms.