Recovering time, not deposits

Nidaa Al Watan

The draft law on “financial regularization and the recovery of deposits” resembles no financial legislation to have come out of the Lebanese state’s “kitchen” in decades. The text is not merely a technical attempt to manage a crisis; it is a political declaration written in financial language; one that moves the Lebanese from the phase of “lost deposits” to the phase of “redefining the deposit” itself. It is a law that presents itself as a roadmap to stability, but at its core it legalizes the loss and turns depositors into “forced partners” in a long game of time, in which the state plays the role of “your adversary pretending to be your judge.”

The draft starts from a seemingly obvious point: creating a framework for financial stability. But any observer knows that stability is built not on promises but on actions, and not through texts deferred for many years. Through this project, the authorities are attempting to show their ability to restore “the financial system” by dividing deposits, organizing repayment, cleaning up irregular operations, and completing a legal engineering process that stretches over two decades—ending with the depositor recovering part of their money, or what remains of its value once the long-term maturity arrives.

The heart of the draft lies in Chapter Seven on “deposit recovery.” Here, its true “philosophy” is revealed: every depositor will receive $100,000 in cash, paid in installments over four consecutive years. This sentence alone exposes the gap between ambition and reality. The state is not saying: “We will return the deposits”; it is saying: “We will begin with 100,000, and the rest we leave to time.”

Medium and large deposits, and those above them, are transformed into asset-backed financial certificates issued in categories A, B, and C, with annual interest rates not exceeding 2%, maturing between 10 and 20 years. Meaning that the depositor whose funds have been frozen since 2019 is being asked to wait another decade or two to recover what was lost. Here, the deposit is no longer a fixed right, but a debt claim on an uncertain future.

What the authorities are actually doing is bottling the country’s social capital in a giant container and throwing it into the sea of time. In other words, the years themselves are used as an insulating barrier between the depositor and their money, while the state and the central bank take charge of managing the assets supposedly backing the certificates. These assets include gold, real estate, shares in companies, outstanding debts, and various revenues. But these same assets require meticulous management, the ability to liquidate, and political stability… all conditions absent in a country that reshapes its crises every year and with every new deadline.

The most dangerous part is that the state presents this mechanism as though it were a “magic solution.” But a solution requires acknowledging the loss, determining responsibility, and rebuilding the financial system from its foundations. The project seems to do the opposite: it legalizes the loss, spreads it across everyone, and leaves the roots of the crisis without accountability. There is no clear reference to correcting financial policies, nor to reforming the relationship between the state and the central bank, nor to controlling spending, nor to reconsidering public debt mechanisms. The project treats the collapse as a “temporary malfunction,” not as a fully-fledged systemic breakdown…

As for the approach to distributing losses, it does not rely on a standard of justice, but on the “standard” of delay. The state acknowledges its debt to the central bank and converts it into a “perpetual bond” with interest to be determined later, while reorganizing the relationship between the two in a way that makes the debt “sustainable,” not “solvable.” The depositor, meanwhile, has no choice but patience, being the weakest link, and is thus asked to bear the bulk of the loss under the slogan of “protecting financial stability.”

This type of law cannot be read financially alone, but politically as well. It reflects a clear will on the part of the authorities to manage the crisis instead of resolving it. The authorities insist on placing the Lebanese before a fait accompli rather than acknowledging that the economic model governing the country for decades has collapsed. The law recycles the same tools and uses remaining assets as future guarantees instead of proposing a genuine settlement of losses that would impose their true cost on those responsible.

In its explanatory notes, the government speaks of “protecting depositors’ rights.” But rights are protected by action, not by intention. Protecting depositors would have started with transparently determining the financial gap, and designing a fair plan for distributing responsibility: the state and the central bank first, then the banks, and finally the depositor according to their situation. But the draft reflects the opposite logic: the state preserves its capacity, the central bank preserves its balance, and the depositor is asked to wait…

This waiting is the greatest political price. With every passing year without a solution, the conviction deepens that deposits will not be restored at their actual value, and that the state has succeeded in transforming what was an acquired right into a deferred financial promise. This shift in the principle of individual property is no less dangerous than the crisis itself. It is a precedent in which ownership is redefined in the name of the “public interest,” while the public interest is used as a cover to redistribute losses onto those least capable of objecting.

The draft is written as though it were a solution, but in truth it is a political agreement to postpone the explosion. An agreement that buys time but does not buy trust. Indeed, it may deepen mistrust, because deposits that once symbolized personal safety have now become a symbol of the collapse… And the paradox is that the proposed law seeks to restore stability by mortgaging that very stability to the unknown.