Financial Crime World

Assessment of Algeria’s Compliance with Basel Core Principles on Effective Banking Supervision

I. Background

Algeria’s banking system has undergone significant changes since 1994, including privatization and restructuring. The country has a relatively small but growing banking sector, with most banks being owned by the government.

Key Points

  • Algeria’s banking system has undergone significant changes since 1994.
  • The country has a relatively small but growing banking sector.
  • Most banks in Algeria are owned by the government.
  • The central bank is responsible for banking supervision, but its resources are limited.

II. Assessment Findings

The report assesses Algeria’s compliance with the Basel Core Principles on Effective Banking Supervision, which are grouped into five categories:

Categories and Compliance Status

  • Precondition for effective banking supervision (CP 1): Algeria is largely compliant.
  • Licensing and structure (CPs 2-5): Algeria does not comply with most of the principles in this category.
  • Prudential regulations and requirements (CPs 6-15): Algeria has weaknesses in this area.
  • Methods of ongoing supervision (CPs 16-20): Algeria needs to improve its supervisory capacity.
  • Information requirements (CP 21), Formal powers of supervisors (CP 22), and Cross-border banking (CPs 23-25): Algeria has some compliance issues in these areas.

III. Main Recommendations and Response of the Authorities

The report provides recommendations for the authorities to improve their compliance with the Basel Core Principles, including:

Recommendations

  • Strengthen licensing procedures: The authorities should review and revise existing licensing requirements.
  • Enforce compliance with existing regulations: The central bank should strengthen its capacity to enforce existing regulations.
  • Adopt FATF principles on money laundering: Algeria should adopt international best practices for combating money laundering.
  • Improve off-site and on-site supervisions: The authorities should develop a comprehensive system for ongoing supervision.

IV. Summary of Assessment Findings

The report concludes that Algeria has made significant progress in strengthening its banking sector, but there are still areas for improvement to enhance compliance with the Basel Core Principles.