Libyan cheap oil prices ... “Increases banking difficulties of operation in Libya
There was no vision excluded from the financial difficulties caused by the Libyan crisis under the cheap international oil, the Libyan state sank into the quagmire of costly economic setbacks that weakened the Libyan economic development movement.
Despite the many challenges facing the State of Libya in the context of the suffocating crisis as well as the lack of internal political stability, would naturally, affect the stability of the Libyan banking sector.
More importantly, the Central Bank of Libya is unable to continue the practice the supervision and control in restoring the Libyan banking sector activity and vitality through the modernization and development of the products of the services it provides.
The lack of liquidity allocated to Libyan banks at the right time for customers withdrawals, the dealing with non-performing loans that exists in states of defaults.
Lack of development payment tools and the non-adoption accounting standards for banking training, makes the Libyan banking sector falter in lacking good performance.
Government banks still have full control of the banking sector, but efforts by the Central Bank of Libya to restructure the banking system to diversify the ownership of Libyan banks have not seen a great interest.
Work involving the private sector ownership of Libyan banks and allowing non-Libyans to invest and own shares in Libyan banks would reinforce the vitality of banking in Libya.
The Libyan banking sector is considered the most important and largest artery in the Libyan economic development, the entry of foreign banks, as well as foreign investments, represents primarily the development of the Libyan banking sector.
Development banking strategy aimed primarily at transferring foreign banking knowledge, acquired experience, technical know-how to the training workers in Libyan banks.
Libya currently has 16 local commercial banks, four of which are specialized banks, as well as twenty-two Arab and foreign banks.
The Libyan banking sector also includes Libyan Foreign Bank, a Libyan joint stock company which operates outside the Libyan state in about 40 banking institutions around the world.
The “Libyan Foreign Bank”, which was established under Libyan Law No. 18 of 1972, set its capital at 10 million Libyan Dinars and then Libya amended Bank's law several times with the aim of increasing its capital.
At the beginning of 2010 a year before the Libyan February Revolution, the General Assembly of the bank issued a decision to raise its capital to 8.7 billion dollars, The “ Libyan Foreign Bank “ is a bank owned by the Central Bank of Libya and is operating and working outside and inside Libya.
The “Libyan Investment Corporation”, which has five branches, including the “Libyan Foreign Investment Company”, “Libya Africa Investment Portfolio”, “Long Term Investment Portfolio”, “Oil Investment Company” and “Libyan Fund for Internal Investment and Development” They all operate outside Libya, and they are regulated and governed by international financial laws.
It was not surprising with a miss management of wealth, Libyan economy became totally ruined, a large wealth Libya possesses in foreign investments, in a” Gas and Oil Rich Country” which is undergoing today, an extreme economic crisis that reached the Libyan state with the financial deterioration and national economic bankruptcy.
Written by: Ramzi Halim Mavrakis
Libyan businessman, resident in the United States.