Financial Sector Assessment : Algeria
Over the past decade, Algeria has courageously attempted to modernize its financial system, despite social strife, and unique challenges posed by the large hydrocarbon sector. However, lending by state-owned banks, mostly to public entities, still...
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| Format: | Financial Sector Assessment Program (FSAP) |
| Language: | English en_US |
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Washington, DC
2013
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2004/06/4945558/algeria-financial-sector-assessment http://hdl.handle.net/10986/15942 |
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okr-10986-15942 |
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| recordtype |
oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ACCOUNTING ACCOUNTING STANDARDS AGENTS APPLICATIONS AUDITING AUTONOMY BANK LENDING BANK LIQUIDITY BANK PRIVATIZATION BANK RATINGS BANK RESERVES BANK RISK BANKING SECTOR BANKING SUPERVISION BANKING SYSTEM BANKRUPTCY BANKRUPTCY PROCEDURES BANKS BROKERS CAPITAL GAINS CENTRAL BANK COMMERCIAL BANKS COMPARATIVE ADVANTAGE COMPETITIVE MARKETS CONTINGENT LIABILITIES CONTRACTUAL SAVINGS CONTRACTUAL SAVINGS INSTITUTIONS CORPORATE GOVERNANCE CREDIT INSURANCE CREDIT RISK CREDIT RISKS DEBT DEFAULT RISK DEPOSIT INSURANCE DEPOSITORS DEPOSITS EFFECTIVE DEMAND EXCESS LIQUIDITY FACTORING FINANCIAL ACCOUNTING FINANCIAL DATA FINANCIAL INFORMATION FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARIES FINANCIAL INTERMEDIATION FINANCIAL MARKETS FINANCIAL POLICIES FINANCIAL SERVICES FOREIGN BANKS FOREIGN EXCHANGE HOUSING HOUSING FINANCE INCOME INCOME GROUPS INSPECTIONS INSURANCE INSURANCE COMPANIES INSURANCE FUNDS INSURANCE PRODUCTS INSURERS INTEREST RATES LAWS LEGAL FRAMEWORK LIFE INSURANCE LIFE INSURANCE COMPANIES LIQUIDATION LIQUIDATION VALUE MACROECONOMIC POLICIES MACROECONOMIC STABILIZATION MANAGEMENT CONTROL MARKET RISK MERGERS MICROFINANCE MONETARY AGGREGATES MORTGAGE INSURANCE MOTOR INSURANCE MUNICIPALITIES NET WORTH NEW ENTRANTS NON-LIFE INSURANCE NONPERFORMING LOANS OIL OPERATING COSTS OPERATING EXPENSES PENALTIES PENSION FUNDS PORTFOLIOS PREMIUMS PRIVATE BANKS PRIVATIZATION PRODUCTIVITY PROFITABILITY PROGRAMS PROPERTY RIGHTS PRUDENTIAL REGULATION PRUDENTIAL REGULATIONS PRUDENTIAL REQUIREMENTS PUBLIC DEBT PUBLIC ENTERPRISES REGULATORY FRAMEWORK REINSURANCE RESOURCE ALLOCATION SAVINGS SECURITIES SECURITIES MARKETS SETTLEMENT SYSTEMS SHAREHOLDERS SMALL BANKS SOCIAL SERVICES SOLVENCY STATE BANKS STATE GUARANTEES STOCK PRICES TAXATION TRADING TRANSACTION COSTS TRANSPARENCY VOLATILITY WORKING CAPITAL FINANCIAL SECTOR REFORM STATE-OWNED BANKS STATE-OWNED ENTERPRISES PRIVATIZATION HYDROCARBON RESOURCES PUBLIC SECTOR MANAGEMENT BANKING SYSTEMS BANKING RISK MANAGEMENT BANK SUPERVISION BANKING REGULATIONS PUBLIC FINANCE GUARANTEES SUBSIDIES OPERATIONAL INTERVENTIONS RESTRUCTURING FINANCIAL MANAGEMENT PRUDENTIAL REGULATIONS PUBLIC DEBT PUBLIC EXPENDITURES REGULATORY FRAMEWORK OIL SUBSIDIES BANK LIQUIDITY CREDIT RISK PREMIUM INSTITUTIONAL FRAMEWORK |
| spellingShingle |
ACCOUNTING ACCOUNTING STANDARDS AGENTS APPLICATIONS AUDITING AUTONOMY BANK LENDING BANK LIQUIDITY BANK PRIVATIZATION BANK RATINGS BANK RESERVES BANK RISK BANKING SECTOR BANKING SUPERVISION BANKING SYSTEM BANKRUPTCY BANKRUPTCY PROCEDURES BANKS BROKERS CAPITAL GAINS CENTRAL BANK COMMERCIAL BANKS COMPARATIVE ADVANTAGE COMPETITIVE MARKETS CONTINGENT LIABILITIES CONTRACTUAL SAVINGS CONTRACTUAL SAVINGS INSTITUTIONS CORPORATE GOVERNANCE CREDIT INSURANCE CREDIT RISK CREDIT RISKS DEBT DEFAULT RISK DEPOSIT INSURANCE DEPOSITORS DEPOSITS EFFECTIVE DEMAND EXCESS LIQUIDITY FACTORING FINANCIAL ACCOUNTING FINANCIAL DATA FINANCIAL INFORMATION FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARIES FINANCIAL INTERMEDIATION FINANCIAL MARKETS FINANCIAL POLICIES FINANCIAL SERVICES FOREIGN BANKS FOREIGN EXCHANGE HOUSING HOUSING FINANCE INCOME INCOME GROUPS INSPECTIONS INSURANCE INSURANCE COMPANIES INSURANCE FUNDS INSURANCE PRODUCTS INSURERS INTEREST RATES LAWS LEGAL FRAMEWORK LIFE INSURANCE LIFE INSURANCE COMPANIES LIQUIDATION LIQUIDATION VALUE MACROECONOMIC POLICIES MACROECONOMIC STABILIZATION MANAGEMENT CONTROL MARKET RISK MERGERS MICROFINANCE MONETARY AGGREGATES MORTGAGE INSURANCE MOTOR INSURANCE MUNICIPALITIES NET WORTH NEW ENTRANTS NON-LIFE INSURANCE NONPERFORMING LOANS OIL OPERATING COSTS OPERATING EXPENSES PENALTIES PENSION FUNDS PORTFOLIOS PREMIUMS PRIVATE BANKS PRIVATIZATION PRODUCTIVITY PROFITABILITY PROGRAMS PROPERTY RIGHTS PRUDENTIAL REGULATION PRUDENTIAL REGULATIONS PRUDENTIAL REQUIREMENTS PUBLIC DEBT PUBLIC ENTERPRISES REGULATORY FRAMEWORK REINSURANCE RESOURCE ALLOCATION SAVINGS SECURITIES SECURITIES MARKETS SETTLEMENT SYSTEMS SHAREHOLDERS SMALL BANKS SOCIAL SERVICES SOLVENCY STATE BANKS STATE GUARANTEES STOCK PRICES TAXATION TRADING TRANSACTION COSTS TRANSPARENCY VOLATILITY WORKING CAPITAL FINANCIAL SECTOR REFORM STATE-OWNED BANKS STATE-OWNED ENTERPRISES PRIVATIZATION HYDROCARBON RESOURCES PUBLIC SECTOR MANAGEMENT BANKING SYSTEMS BANKING RISK MANAGEMENT BANK SUPERVISION BANKING REGULATIONS PUBLIC FINANCE GUARANTEES SUBSIDIES OPERATIONAL INTERVENTIONS RESTRUCTURING FINANCIAL MANAGEMENT PRUDENTIAL REGULATIONS PUBLIC DEBT PUBLIC EXPENDITURES REGULATORY FRAMEWORK OIL SUBSIDIES BANK LIQUIDITY CREDIT RISK PREMIUM INSTITUTIONAL FRAMEWORK World Bank Financial Sector Assessment : Algeria |
| geographic_facet |
Middle East and North Africa Algeria |
| description |
Over the past decade, Algeria has
courageously attempted to modernize its financial system,
despite social strife, and unique challenges posed by the
large hydrocarbon sector. However, lending by state-owned
banks, mostly to public entities, still dominates financial
intermediation, financial markets remain in their infancy,
and, implementation of regulatory reforms is lagging. And,
because of hydrocarbon-funded state support to borrowers and
lenders alike, the financial system appears stable, although
this "stability" carries high costs, and distorts
risk pricing and governance. The report emphasizes that to
alter these patterns, the authorities should push on
several, mutually reinforcing policy fronts: privatization
of all public banks over the medium term; improvements in
the banking system, namely banking operations, to cut
intermediation costs; stimulate a strong institutional
framework, and regulation of hydrocarbon-induced liquidity
and credit cycles, that curtail banks' risk-taking;
and, undertake longer-term reforms to stimulate the non-bank
financial sector. Nevertheless, the report also stipulates
that privatization should not attempt to recoup past
budgetary outlays, but prevent future ones, and let new
owners decide on investments, and cost cuts. Direct
budgetary support should replace lending to non-viable
State-owned enterprises (SOEs) and financial support to
public programs, such as housing or agriculture. Instead,
the government should consider replacing the current
guarantee subsidies, with direct budgetary financing of
public entities, whereas in managing their housing and
agriculture finance programs, the authorities should
consider alternative methods. Banking supervision, and
prudential regulation need strengthening in many core areas.
The Bank of Algeria (BA) as supervisor, can play a useful
role in the operational restructuring of public banks by
enforcing regulation to gain a firm handle on bank
profitability. But, while the ordinance on Money and Credit
of October 2003 contain some improvements, other provisions
could undermine BA's financial, and operational
autonomy. Financial system stability and development in
Algeria, have strong overtones of public debt, and
expenditure management, because of the policies that
regulate the effects of the oil cycle on bank liquidity, and
credit risks. |
| format |
Economic & Sector Work :: Financial Sector Assessment Program (FSAP) |
| author |
World Bank |
| author_facet |
World Bank |
| author_sort |
World Bank |
| title |
Financial Sector Assessment : Algeria |
| title_short |
Financial Sector Assessment : Algeria |
| title_full |
Financial Sector Assessment : Algeria |
| title_fullStr |
Financial Sector Assessment : Algeria |
| title_full_unstemmed |
Financial Sector Assessment : Algeria |
| title_sort |
financial sector assessment : algeria |
| publisher |
Washington, DC |
| publishDate |
2013 |
| url |
http://documents.worldbank.org/curated/en/2004/06/4945558/algeria-financial-sector-assessment http://hdl.handle.net/10986/15942 |
| _version_ |
1764431685263294464 |
| spelling |
okr-10986-159422021-04-23T14:03:23Z Financial Sector Assessment : Algeria World Bank ACCOUNTING ACCOUNTING STANDARDS AGENTS APPLICATIONS AUDITING AUTONOMY BANK LENDING BANK LIQUIDITY BANK PRIVATIZATION BANK RATINGS BANK RESERVES BANK RISK BANKING SECTOR BANKING SUPERVISION BANKING SYSTEM BANKRUPTCY BANKRUPTCY PROCEDURES BANKS BROKERS CAPITAL GAINS CENTRAL BANK COMMERCIAL BANKS COMPARATIVE ADVANTAGE COMPETITIVE MARKETS CONTINGENT LIABILITIES CONTRACTUAL SAVINGS CONTRACTUAL SAVINGS INSTITUTIONS CORPORATE GOVERNANCE CREDIT INSURANCE CREDIT RISK CREDIT RISKS DEBT DEFAULT RISK DEPOSIT INSURANCE DEPOSITORS DEPOSITS EFFECTIVE DEMAND EXCESS LIQUIDITY FACTORING FINANCIAL ACCOUNTING FINANCIAL DATA FINANCIAL INFORMATION FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARIES FINANCIAL INTERMEDIATION FINANCIAL MARKETS FINANCIAL POLICIES FINANCIAL SERVICES FOREIGN BANKS FOREIGN EXCHANGE HOUSING HOUSING FINANCE INCOME INCOME GROUPS INSPECTIONS INSURANCE INSURANCE COMPANIES INSURANCE FUNDS INSURANCE PRODUCTS INSURERS INTEREST RATES LAWS LEGAL FRAMEWORK LIFE INSURANCE LIFE INSURANCE COMPANIES LIQUIDATION LIQUIDATION VALUE MACROECONOMIC POLICIES MACROECONOMIC STABILIZATION MANAGEMENT CONTROL MARKET RISK MERGERS MICROFINANCE MONETARY AGGREGATES MORTGAGE INSURANCE MOTOR INSURANCE MUNICIPALITIES NET WORTH NEW ENTRANTS NON-LIFE INSURANCE NONPERFORMING LOANS OIL OPERATING COSTS OPERATING EXPENSES PENALTIES PENSION FUNDS PORTFOLIOS PREMIUMS PRIVATE BANKS PRIVATIZATION PRODUCTIVITY PROFITABILITY PROGRAMS PROPERTY RIGHTS PRUDENTIAL REGULATION PRUDENTIAL REGULATIONS PRUDENTIAL REQUIREMENTS PUBLIC DEBT PUBLIC ENTERPRISES REGULATORY FRAMEWORK REINSURANCE RESOURCE ALLOCATION SAVINGS SECURITIES SECURITIES MARKETS SETTLEMENT SYSTEMS SHAREHOLDERS SMALL BANKS SOCIAL SERVICES SOLVENCY STATE BANKS STATE GUARANTEES STOCK PRICES TAXATION TRADING TRANSACTION COSTS TRANSPARENCY VOLATILITY WORKING CAPITAL FINANCIAL SECTOR REFORM STATE-OWNED BANKS STATE-OWNED ENTERPRISES PRIVATIZATION HYDROCARBON RESOURCES PUBLIC SECTOR MANAGEMENT BANKING SYSTEMS BANKING RISK MANAGEMENT BANK SUPERVISION BANKING REGULATIONS PUBLIC FINANCE GUARANTEES SUBSIDIES OPERATIONAL INTERVENTIONS RESTRUCTURING FINANCIAL MANAGEMENT PRUDENTIAL REGULATIONS PUBLIC DEBT PUBLIC EXPENDITURES REGULATORY FRAMEWORK OIL SUBSIDIES BANK LIQUIDITY CREDIT RISK PREMIUM INSTITUTIONAL FRAMEWORK Over the past decade, Algeria has courageously attempted to modernize its financial system, despite social strife, and unique challenges posed by the large hydrocarbon sector. However, lending by state-owned banks, mostly to public entities, still dominates financial intermediation, financial markets remain in their infancy, and, implementation of regulatory reforms is lagging. And, because of hydrocarbon-funded state support to borrowers and lenders alike, the financial system appears stable, although this "stability" carries high costs, and distorts risk pricing and governance. The report emphasizes that to alter these patterns, the authorities should push on several, mutually reinforcing policy fronts: privatization of all public banks over the medium term; improvements in the banking system, namely banking operations, to cut intermediation costs; stimulate a strong institutional framework, and regulation of hydrocarbon-induced liquidity and credit cycles, that curtail banks' risk-taking; and, undertake longer-term reforms to stimulate the non-bank financial sector. Nevertheless, the report also stipulates that privatization should not attempt to recoup past budgetary outlays, but prevent future ones, and let new owners decide on investments, and cost cuts. Direct budgetary support should replace lending to non-viable State-owned enterprises (SOEs) and financial support to public programs, such as housing or agriculture. Instead, the government should consider replacing the current guarantee subsidies, with direct budgetary financing of public entities, whereas in managing their housing and agriculture finance programs, the authorities should consider alternative methods. Banking supervision, and prudential regulation need strengthening in many core areas. The Bank of Algeria (BA) as supervisor, can play a useful role in the operational restructuring of public banks by enforcing regulation to gain a firm handle on bank profitability. But, while the ordinance on Money and Credit of October 2003 contain some improvements, other provisions could undermine BA's financial, and operational autonomy. Financial system stability and development in Algeria, have strong overtones of public debt, and expenditure management, because of the policies that regulate the effects of the oil cycle on bank liquidity, and credit risks. 2013-09-30T21:40:12Z 2013-09-30T21:40:12Z 2004-06 http://documents.worldbank.org/curated/en/2004/06/4945558/algeria-financial-sector-assessment http://hdl.handle.net/10986/15942 English en_US CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Washington, DC Economic & Sector Work :: Financial Sector Assessment Program (FSAP) Economic & Sector Work Middle East and North Africa Algeria |