What is Lebanon’s ‘gap law’ that attempts to end the financial crisis?
Summary
Lebanon's government has approved a draft law called the “gap law” to address its financial crisis, which began in 2019 when the Lebanese currency fell sharply. This law aims to return money to depositors, especially those with smaller amounts, over four years.Key Facts
- Lebanon's financial crisis began in 2019 with a massive drop in the value of the Lebanese Lira.
- Banks in Lebanon limited depositors' access to their money, causing strain for many people.
- The new "gap law" intends to reimburse depositors with up to $100,000 over four years.
- Previous proposals took longer to return similar sums of money.
- A complete financial audit of banks is planned, examining their operations and payments.
- Depositors with more than $100,000 will receive the excess amount in bonds supported by the Central Bank.
- The state might need to cover a financial gap estimated at $70 billion.
- Banks are required to pay only 40% of the withdrawals, despite their role in the financial crisis.
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