Closing the $80 Billion Gap – A Critical Review of the IIF’s Deposit Settlement Plan

Numerous proposals have emerged to address Lebanon’s $80 billion financial gap. Among them, the Institute of International Finance (IIF) has outlined a structured five-year plan titled Roadmap for Deposit Settlement and Financial Restoration. What sets this plan apart is its bold reliance on monetizing gold—through both sales and leasing—and introducing a reformed national currency.

The plan is currently in draft form and is set to be published in the coming weeks. Its goal is to restore liquidity, rebuild trust in the banking system, and stimulate economic activity, all without triggering Inflation or depleting foreign reserves. The IIF emphasizes that success depends on clarity, coordination, and alignment with a broader economic reform agenda, ideally under IMF guidance.

The proposal hinges on seven interdependent reforms:

• Selling some gold holdings
• Leasing some gold holdings
• Launching a new reformed national currency and lirafying $30 billion in deposits over five years
• Tracing and reclaiming crisis-era transfers via legal and cross-border channels
• Unlocking value from underutilized public assets
• Encouraging diaspora investment via targeted instruments
• Generating fiscal surpluses

This analysis critically examines the IIF’s proposal and suggests key adjustments to reinforce its credibility, addresses key vulnerabilities, and better aligns it with Lebanon’s institutional and political realities.

For the full report, click on the link below:

Closing the $80 Billion Gap – A Critical Review of the IIF’s Deposit Settlement Plan