An International Monetary Fund (IMF) mission is due to arrive in Beirut on Monday, amid reports disclosed to Annahar by informed financial sources indicating that the outcome of the talks will lead to the signing of a staff-level agreement. The agreement had been expected to be announced during Finance Minister Yassine Jaber’s talks on the sidelines of Prime Minister Nawaf Salam’s visit to Washington, with the signing set to take place in Beirut. The sources attributed the delay to the IMF’s displeasure over the president’s challenge to Article 3 of the Banking Sector Restructuring Law, which the Fund had requested be amended. The challenge removed the reference to the Code of Money and Credit as the legal basis for implementation, replacing it with reliance on international standards.
The sources revealed that the IMF’s displeasure was addressed through contacts during which Lebanon explained that the challenge concerned only one article and was intended to safeguard the law rather than obstruct its implementation. However, as the agreement approaches signing, this situation has heightened concerns among financial officials over what they describe as an attempt to draw up a so-called “financial Taif Agreement,” referring to efforts to strip the central bank of certain powers and reshape its structure under the banner of reform and restructuring the banking sector. The issue goes beyond technical or administrative amendments, raising a fundamental question about the future of the monetary institution’s independence and who controls its decision-making.
According to these officials, these concerns stem from the experience of the political Taif Agreement, which redistributed executive power among the presidency, the premiership and the Council of Ministers without succeeding in establishing a clear system of accountability. Power thus became a collective responsibility, while the exchange of accusations became a means of evading responsibility for decisions. Today, there are fears that the same experience could be repeated in the monetary sector by weakening the centralisation of decision-making at Banque du Liban and distributing powers among bodies more vulnerable to political influence.
The sources point out that since the 2019 collapse, the central bank and its governor have been held responsible for the largest share of the disaster, while the responsibilities of successive governments, finance ministers and decisions relating to public debt, chronic deficits, electricity and fiscal policies have yet to be fully scrutinised. In reality, the collapse was not the result of isolated monetary decisions, but of accumulated political, financial and banking failures involving multiple parties. This is why reducing the crisis to a single institution is so dangerous: it allows the political class to evade responsibility for running the state over several decades.
The move towards redistributing powers became apparent during the drafting of the Banking Sector Restructuring Law, when amendments were proposed to the composition of the Higher Banking Commission. These would grant the head of the Banking Control Commission voting rights and expand the influence of government-appointed members, potentially shifting the centre of supervisory authority away from Banque du Liban towards a body more susceptible to political power balances. It was also clear that figures from the Sunni community were involved in these amendments, which Hezbollah did not oppose.
The amendments faced legal and constitutional objections, reflected in a 33-page study prepared by experts following a review of the Code of Money and Credit. Attempts to alter the balance of powers were repeated from August 2025 through 2026, amid political and diplomatic pressure invoking the banners of reform and IMF requirements. However, neither attempt achieved its objectives.
Comprehensive Review of the Law
The most sensitive development was the reported demand by the IMF for a comprehensive review of the Code of Money and Credit, alongside the restructuring of Banque du Liban, with both measures considered conditions for reaching an agreement.
The importance of this law lies in the fact that it provides the primary legislative framework governing the monetary and banking system. It defines the central bank’s powers, institutional structure and relationship with the financial sector. Reconsidering it, therefore, is not an ordinary amendment, but an issue that strikes at the foundations of the monetary system and the independence of the central institution.
This does not mean that Banque du Liban should be exempt from reform, the sources say. There is no disagreement over the need to strengthen governance and transparency, conduct audits, and improve oversight and accountability. However, there is a significant difference between correcting institutional shortcomings and dismantling institutional safeguards while transferring powers to bodies that may be subject to political disputes.
Meanwhile, the most pressing economic priorities are clear: determining the state's financial obligations, restructuring public debt, addressing the financial gap, recapitalising banks, establishing a hierarchy of rights and claims, and putting in place a realistic mechanism for recovering depositors' money!
The fundamental question is not whether Banque du Liban needs reform, but who will lead it? With what objectives and safeguards? And in whose interests? If the aim is to improve performance, governance and accountability, this is a necessary course of action. But if the intention is to curtail the powers of the governor and the Central Council and transfer influence to bodies appointed by the political authorities, as appears to be the case, then this amounts more to a redistribution of power than to institutional reform. The irony is that the same political establishment whose failures contributed to the financial collapse is now seeking to expand its influence over the institution tasked with addressing its consequences.
There are fears that the same political model will be replicated in the monetary sector, turning the “financial Taif Agreement” into yet another settlement that redistributes powers, diffuses responsibility and leaves depositors without their money!
Disclaimer: The opinions expressed by the writers are their own and do not necessarily represent the views of Annahar
