Lebanese President Joseph Aoun challenged Article 3 of the country’s amended bank resolution law before the Constitutional Council, placing a central banking reform under judicial review. Reuters reported that the referral occurred this week, while Lebanese outlets said the appeal had been lodged several days earlier and became public on 30 September. The disputed provision sets objectives for managing bank failures, protecting deposits and limiting the use of public funds.
Parliament adopted the amendments on 12 August 2026 after the original legislation passed in August 2025 and underwent an earlier constitutional challenge. The IMF had described the revised law as a major step towards restructuring a banking sector damaged by the 2019 financial collapse. Lebanon is also preparing a financial-gap law intended to allocate losses among the state, central bank, commercial banks and depositors.
ARTICLE 3 AND CENTRAL BANK POWERS
The challenge centres on the amended law’s relationship with Lebanon’s Code of Money and Credit and the independence of Banque du Liban. L’Orient Today and An-Nahar reported that the wording of Article 3 revived a dispute over the central bank’s statutory powers, including those referenced in Article 70 of the code. The precise filing has not been published publicly, so the Constitutional Council’s eventual scope of review remains uncertain.
IMF spokesperson Julie Kozack said the bank resolution law approved by parliament was consistent with international standards. She said the Fund would assess any changes emerging from the constitutional review and provide further advice to the Lebanese authorities. The Fund also requires progress on a financial-gap law, a debt-sustainable 2027 budget and a medium-term fiscal framework before a new programme can advance.
REFORM TIMETABLE FACES FRESH UNCERTAINTY
The appeal does not itself determine that the amendments will be struck down. An-Nahar cited a constitutional lawyer as saying the council could examine the wider amending law, although annulment of the amendments would not automatically erase the original statute. The outcome will therefore determine whether the recently revised framework can enter into force unchanged or must return to lawmakers.
For banks and depositors, the immediate issue is whether the review delays implementation of a framework designed to govern recapitalisation, restructuring and liquidation. The IMF has linked further programme progress to the law’s entry into force and to legislation addressing losses from the crisis. The next concrete milestone is the Constitutional Council’s decision and any resulting publication of the filing or amended text.