Middle East News: Standoff with Lebanon banks could derail IMF deal, minister says – Gulf Digital News

Middle East News: Standoff with Lebanon banks could derail IMF deal, minister says – Gulf Digital News

Lebanon's efforts to secure $3 billion in International Monetary Fund support to help it tackle its financial crisis could be derailed by divisions over how to deal with massive financial sector losses, the economy minister told Reuters on Wednesday.

The Association of the Banks of Lebanon (ABL) said at the weekend that it rejected the latest draft of the government's recovery plan, which foresees a bail-in of some deposits, haircuts to others, and asks bank shareholders to inject new capital.

"We won't be able to secure a full IMF deal without the banking restructuring. It's a major piece of the prior actions" that the IMF wants Lebanon to take before agreeing to a full support deal, said economy minister Amin Salam.

"You need the government, the central bank and the banking sector to be on the same page. You can't do it if they're not all on one page," added Salam, who is also a member of Lebanon's negotiating team with the IMF.

The ABL called the plan "disastrous", however, and said it would leave banks and depositors shouldering the "major portion" of what the government says is $72 billion in losses.

The ABL's approval is not required for the government to begin implementing a