On the Way Out of Lebanon's Triple Crisis

Ishac Diwan

No 2518, FDL Policy Notes from CEPREMAP

Abstract: Six years into Lebanon's crisis, national income has declined to half its potential, necessitating urgent reforms to restore economic growth. The situation is complicated by the interconnected issues of banking sector restructuring, public debt, and currency stability (Diwan and Chaoul, 2023). The current Government is addressing these challenges head on with recent legislative actions, including a law to lift bank secrecy and a banking restructuring law nearing completion (IMF, 2025). A third piece, the "Gap Law," aims to redistribute over $70 billion in losses among creditors and is expected to face significant debate and opposition. This publication highlights the banking sector's restructuring within the context of Lebanon’s broader crises. It outlines key policy dilemmas and the components of the restructuring puzzle that are coming together. The challenge is to finalise each part and integrate them into a viable overall financing plan.

Keywords: Banking crisis; crisis resolution; external debt; debt distress; Lebanon; investment and growth (search for similar items in EconPapers)
Pages: 12 pages
Date: 2025-11
New Economics Papers: this item is included in nep-ara
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Persistent link: https://EconPapers.repec.org/RePEc:cpm:notfdl:2518

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