Key Takeaways
- Lebanon's Prime Minister Nawaf Salam is pushing for a new law to address the 2019 financial crisis, proposing that depositors with up to $100,000 be repaid over four years, while larger depositors receive asset-backed bonds with maturities up to 20 years.
- Ukrainian President Volodymyr Zelenskiy is set to meet with U.S. President Donald Trump to finalize a peace plan, with security guarantees for Ukraine reportedly "almost ready" and a 20-point plan "90% complete."
- Zelenskiy also expressed a willingness to hold elections in Ukraine if allies can ensure security, a move that comes amidst ongoing discussions about democratic timelines during wartime.
- The Lebanese banking reform is critical for unlocking international aid, particularly from the International Monetary Fund, to address an estimated funding shortfall exceeding $70 billion.
Lebanon is moving forward with a crucial draft law aimed at resolving its protracted financial crisis, which began in 2019. Prime Minister Nawaf Salam has urged swift cabinet approval for the legislation, which outlines a framework for repaying frozen bank deposits and distributing financial losses. This development is seen as a vital step towards securing much-needed international financial assistance.
Under the proposed law, small depositors with balances of up to $100,000 will be repaid in monthly or quarterly installments over a period of four years. For those with deposits exceeding $100,000, the plan stipulates repayment through tradable, asset-backed securities to be issued by the central bank, Banque du Liban (BdL). These securities would see at least 2% of their value paid annually, with maturity periods ranging from 10 years for deposits up to $1 million, to 20 years for those over $5 million. The securities are expected to be backed by the income and returns of BdL-owned assets, including potential proceeds from precious metals.
The draft law seeks to address a massive funding shortfall, estimated at $70 billion in 2022 and believed to be higher now. It also includes provisions to recover funds transferred abroad by politically exposed persons and major shareholders since 2019. While Prime Minister Salam described the bill as a "realistic and fair step" towards restoring rights and halting the collapse, the Association of Banks in Lebanon has raised objections, arguing the proposals do not reflect banks' ability to meet their obligations.
Meanwhile, Ukrainian President Volodymyr Zelenskiy is intensifying diplomatic efforts to end the war with Russia, announcing an upcoming meeting with U.S. President Donald Trump. The focus of these high-level discussions will be a comprehensive peace plan, with Zelenskiy indicating that a 20-point peace plan is now "90% complete" and a document on security guarantees is "almost ready."
Zelenskiy also stated his intention to discuss additional pressure on Russia with Trump, suggesting that allies could play a significant role in ensuring security during potential referendums and elections. This comes as Zelenskiy has expressed readiness to hold national elections if Ukraine's allies can guarantee security during wartime, despite constitutional prohibitions under martial law. The proposed security guarantees are described as NATO-style, mirroring Article 5, and would involve commitments from the United States, NATO, and European signatory states. However, contentious issues such as territorial concessions, particularly concerning the Donbas region, remain a significant hurdle in the ongoing peace negotiations.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.