BEIRUT — Lebanon is once again at the center of public outrage as the government discusses the proposed “Financial Gap Law”.

Marketed as a legislative measure to address the country’s ongoing financial crisis, the bill has sparked intense criticism from politicians, trade unions, civil society organizations, and ordinary depositors. 

At the heart of the controversy lies the perception that the law shifts the primary financial burden onto depositors, while leaving the existing banking system largely intact, without enforcing accountability or meaningful reform.

The Financial Gap Law, introduced by the Lebanese government under Prime Minister Nawaf Salam, claims to offer a framework for restoring stability to the banking sector and addressing the massive losses faced by banks and depositors alike.

It proposes mechanisms to bridge the financial shortfall created by the collapse of several banks, allegedly amounting to tens of billions of dollars.

However, critics argue that the bill fails to identify or punish responsible parties, whether banking executives or political officials; does not mandate the state or the central bank to assume direct financial responsibility for policy failures that led to the crisis; and transfers the losses almost entirely onto depositors, particularly affecting ordinary citizens and pension funds.

The public reaction has been swift. On the day the cabinet debated the law, depositors staged protests near the presidential palace in Baabda, demanding full access to their frozen funds and condemning the bill as unfair and unjust.

Politicians have also voiced concerns. Gibran Bassil, leader of the Free Patriotic Movement, criticized the law on social media, stating that it reflects “the government’s inability to develop a real reform plan” and is merely a demonstration of action without clarity or direction.

From a legal standpoint, the law raises significant questions regarding constitutional and civil rights protections in Lebanon. 

By transferring the financial burden from the state and banking institutions to depositors, the law arguably violates property rights. 

- Depositors’ funds are legally considered their private property. Any unilateral reduction or reallocation without consent can constitute an unlawful expropriation.

— Undermines institutional accountability. By exempting the government and the central bank from responsibility, the law conflicts with principles of administrative and financial liability under Lebanese law.

— Threatens social security and pension systems. With depositor funds at risk, the stability of retirement funds and social guarantees could be compromised, affecting hundreds of thousands of citizens.

For its part, the Consumer Protection Association and the Beirut Engineers Syndicate have strongly opposed the bill. 

It argues that it does not constitute a reform but rather a management of collapse, distributing losses unfairly while reinforcing entrenched systemic failures.
The syndicate further warns that any infringement on depositors’ rights would be considered a direct assault on legally protected funds, with potential legal challenges forthcoming.