Lebanon opens new IMF bailout talks amid reform impasse

Lebanon began new talks with the International Monetary Fund on Tuesday on a bailout, with negotiations still blocked by a dispute over banking reforms.

Lebanese Finance Minister Yassine Jaber said the two sides would meet until Friday and that the aim was to come out of the week with a preliminary agreement.

An IMF staff-level agreement reached in April 2022 set conditions to unlock assistance, including a law on the distribution of losses in the banking sector. Parliament has still not voted on that measure, known as the financial gap law.

Jaber said the sticking point remains how to distribute losses between the state, the central bank, commercial banks and depositors. The cabinet submitted a draft to parliament in 2025, but the text is contested by the banking sector and political parties.

“Lebanon cannot continue with a cash economy and without an effective banking sector,” Jaber said, adding that the gap law needed to pass so the banking sector could be reformed.

Parliament last year adopted banking secrecy reform and a law on restructuring the sector, two other IMF conditions.

Lebanon's financial crisis has deprived savers of access to deposits and pushed many people toward cash because of lost confidence in banks. In August, the World Bank estimated that Lebanon's economy would shrink 6.4 percent this year, saying two successive wars between Israel and Iran-backed Hezbollah since 2023 had derailed efforts to revive the economy.