## Algeria: Financial System Stability Assessment

_IMF Staff Country Reports, June 10, 2014_

## Source details

**Canonical URL:** [Algeria: Financial System Stability Assessment](https://www.imf.org/en/publications/cr/issues/2016/12/31/algeria-financial-system-stability-assessment-41624)

## Other formats

- [Markdown version](/en/publications/cr/issues/2016/12/31/algeria-financial-system-stability-assessment-41624/index.md)
- [Structured JSON version](/en/publications/cr/issues/2016/12/31/algeria-financial-system-stability-assessment-41624/index.json)
- [Bundle manifest](/en/publications/cr/issues/2016/12/31/algeria-financial-system-stability-assessment-41624/bundle-manifest.json)

## Bibliographic details
- Published: June 10, 2014
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781498328739.002

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### Overview
- The Financial System Stability Assessment finds Algeria’s financial system "stable overall but thoroughly underdeveloped."
- The global crisis "has had virtually no impact on Algeria’s financial system."
- Financial sector reforms have been delayed by "the emergence of global financial and regional political turmoil."

### Key findings
- Protective features shielding the banking sector from external shocks:
  - "Pervasive exchange controls."
  - "Widespread public ownership."
  - "An abundance of domestic funding."
- Structural constraints and policy choices:
  - Privatization of banks has been "halted."
  - Consumer lending has been "suspended."
- Progress on prior recommendations:
  - "The authorities have also made progress in a number of areas implementing the recommendations of the 2007 Financial Sector Assessment Program update."

### Financial sector features and vulnerabilities
- Market structure and ownership:
  - Dominance of state-owned banks contributes to limited development of private banking services.
- Market openness and external exposure:
  - Exchange controls and domestic funding reduce exposure to external shocks but constrain integration with international financial markets.
- Lending and credit dynamics:
  - Suspension of consumer lending limits household credit growth and financial deepening.
- Regulatory context:
  - Ongoing implementation of selected 2007 FSAP update recommendations indicates partial regulatory progress amid a cautious reform environment.

### Policy implications and recommendations
- Reform sequencing and priorities (inferred from findings presented):
  - Resume and sequence financial sector reforms when global and regional stability allow, with attention to privatization where appropriate.
  - Reassess exchange control regime to balance external shock protection with financial deepening and market integration.
  - Re-evaluate consumer lending suspension to support household access to credit while maintaining financial stability safeguards.
  - Continue implementing outstanding recommendations from the 2007 Financial Sector Assessment Program update to strengthen supervision, resolution frameworks, and market infrastructure.

*Source: https://www.imf.org/en/publications/cr/issues/2016/12/31/algeria-financial-system-stability-assessment-41624*

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## Content in this bundle

- **Algeria: Financial System Stability Assessment; IMF Country Report No. 14/161, January 9, 2014**
  - [Algeria: Financial System Stability Assessment; IMF Country Report No. 14/161, January 9, 2014 (Markdown version)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2014/_cr14161.pdf.md){rel="alternate" type="text/markdown"}
  - [Algeria: Financial System Stability Assessment; IMF Country Report No. 14/161, January 9, 2014 (PDF)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2014/_cr14161.pdf){rel="external" type="application/pdf"}
- **Algérie évaluation de la stabilité du secteur financier; Rapport du FMI No. 14/161; 9 janvier 2014**
  - [Algérie évaluation de la stabilité du secteur financier; Rapport du FMI No. 14/161; 9 janvier 2014 (Markdown version)](/-/media/websites/imf/imported-publications/external/french/pubs/ft/scr/2014/_cr14161f.pdf.md){rel="alternate" type="text/markdown"}
  - [Algérie évaluation de la stabilité du secteur financier; Rapport du FMI No. 14/161; 9 janvier 2014 (PDF)](/-/media/websites/imf/imported-publications/external/french/pubs/ft/scr/2014/_cr14161f.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/cr/issues/2016/12/31/algeria-financial-system-stability-assessment-41624_