What if Lebanon's depositor recovery law stalls in parliament?
Parliament failing to pass the bank-restructuring law leaves depositor claims frozen and the dollarized banking system in limbo — a domestic institutional impasse, not a tradable global credit event. Rhymes with Cyprus's 2013 deposit bail-in stalemate, though Lebanon's losses are far larger and unallocated. The IMF conditions any program on this law, so reform paralysis blocks the only external funding; the forward angle is that frozen deposits entrench a cash-only economy rather than producing a clean market catalyst.
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The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (electric blue) over time vs the market's (Polymarket, amber), from the past toward the 0–6 months horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. Loading the probability audit trail…
What it would mean
If this plays out, it is a risk-off shock. Parliament fails to pass the pending bank-restructuring law, leaving depositor claims frozen and the dollarized banking system in limbo. The trigger decomposes into signed root‑shocks — Credit spreads ▲ · Recession signal ▲ — which propagate through our causal graph to the markets below.