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Lebanon's "Gap Law" Approved: Controversy Over Frozen Deposits

12/30/2025

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Summary

Story summary

Lebanon's Cabinet approved the controversial "gap law" on December 29, 2025, to recover frozen bank deposits after the 2019 crisis.
The law allows gradual repayment for deposits under $100,000.
Larger deposits convert to long-term bonds.
Critics say the measure formalizes losses without guarantees for depositors.
Observers warn the state may bear the financial burden, affecting the Lebanese population.

History

Historical Context

Lebanon's financial crisis intensified in 2019, prompting widespread protests against government mismanagement under Prime Minister Hassan Diab. The crisis saw over 70% of the population living below the poverty line, leading to the freezing of bank deposits. The government's recent "gap law" aims to recover these deposits, but critics argue it lacks adequate protections for depositors, highlighting ongoing economic instability.

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Story summary

Lebanon's Cabinet approved the controversial "gap law" on December 29, 2025, to recover frozen bank deposits after the 2019 crisis.
The law allows gradual repayment for deposits under $100,000.
Larger deposits convert to long-term bonds.
Critics say the measure formalizes losses without guarantees for depositors.
Observers warn the state may bear the financial burden, affecting the Lebanese population.

1 / 2