Libya: Selected Issues
IMF Staff Country Reports, June 8, 2023
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- Libya: Selected Issues
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Bibliographic details
- Published: June 8, 2023
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400244070.002
Overview
- Provides an overview of the challenges facing the banking sector in Libya and proposes reforms to strengthen financial stability and accelerate credit growth.
- Priority reforms are identified using the "2012 sound principles for effective supervision", issued by the Basel Committee for Banking Supervision (BCBS), while accounting for limitations imposed by the country’s fragility and conflict situation.
Banking sector challenges
- Banks are struggling to develop Islamic finance products.
- Credit growth is constrained by weaknesses in financial stability frameworks and supervisory capacity.
- Fragility and conflict impose practical limits on the pace and scope of reforms.
Financial stability mandate and governance
- Financial stability mandate and governance architecture should be strengthened.
- Financial stability mandate and governance are not clearly articulated in the banking law.
- Governance weaknesses hinder clear accountability for macrofinancial resilience and crisis prevention.
Reporting, management, and supervision
- Comprehensive internal and external reporting systems should be developed to strengthen management and facilitate supervision.
- Strengthened reporting would support both bank-level risk management and Central Bank of Libya supervisory oversight.
Policy recommendations and implementation approach
- Recommend that the authorities follow a gradual and consultative approach to regulatory reforms.
- Support the development of human capital and systems at the commercial banks and at the Central Bank of Libya.
- Prioritize reforms consistent with the BCBS 2012 sound principles, adapted to the country’s fragility and conflict-related constraints.
Source: Libya: Selected Issues, June 8, 2023.
Content in this bundle
- Libya: Selected Issues; IMF Country Report No. 23/202; May 5, 2023