Cabinet approves banks financial gap law after long debate
Cabinet approved Friday a long-awaited banking draft bill that would distribute losses from the 2019 economic crisis.
Thirteen ministers voted in favor of the financial gap law amid the objection of nine ministers: three Lebanese Forces ministers, two Hezbollah ministers, Kataeb minister Adel Nassar, and ministers Tamara al-Zein (Amal), Noura Bayrakdarian (Tashnag Party), and Charles al-Hajj.
LF foreign minister Youssef Rajji had left the session before the voting.
The session Friday was the third. The ministers had met earlier this week on Monday and Tuesday to discuss the law, while some depositors gathered Monday in Baabda where the first session was held to protest the law. Some depositors also protested Friday near the Grand Serail.
Some of the ministers who voted against the law were demanding an amendment to the draft bill in order to endorse it and some of the ministers who voted in favor of the law voiced a few reservations about it.
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. Those who have less than $100,000 in the banks constitute 85% of the depositors.
The wealthiest depositors will see the remainder of their money compensated by asset-backed securities.
The law will now be sent to Parliament for voting.
26 December 2025, 19:16
00
Causes & Triggers
Unsustainable Debt: Decades of government deficits and financial engineering by the Central Bank (Banque Du Liban - BDL) created massive debt.
Currency Peg & Dollar Drain: The BDL borrowed dollars from local banks to maintain the Lebanese pound's peg, depleting reserves.
Sudden Controls: In October 2019, the central bank imposed informal capital controls, locking depositors out of their funds and creating a parallel market.
Corruption & Policy Failures: Decades of corruption and policies favoring subsidies (especially energy) and low taxes crippled public finances.
26 December 2025, 19:17
00
Google AI concludes with: Lebanon does have a functioning—though politically divided—cabinet. Today's vote (December 26, 2025) passed with a 13-to-9 majority, showing that while the government is fragmented, it is currently capable of executive action. However, these laws must still be ratified by the Parliament, where significant opposition remains.
Despite these measures, international observers and many Lebanese citizens remain skeptical, as the political elite responsible for the crisis still largely retain power.
