Enhancing Financial Stability in Algeria

The Bank of Algeria has made significant strides in strengthening financial stability, focusing on improving monetary stability and bolstering the resilience of the banking system. Key achievements include:

Key Achievements

• Increased bank capital: The bank’s capital grew by DA 76 billion during the latter half of 2009, reaching a solvency ratio of 21.78%.
• Improved liquidity surplus: Despite external shocks in 2009, the banking system maintained a high level of liquid assets and short-term liabilities.
• Enhanced risk management: The bank implemented new regulations and guidelines for risk management, including a liquidity ratio and intensified off-site and on-site supervision.
• Strengthened legal framework: New legislative provisions in 2010 consolidated the legal framework governing the banking sector, providing a clearer mission for financial stability and expanding the Bank of Algeria’s powers to investigate banks and financial institutions.

Future Objectives

The bank aims to continue improving financial stability through:

• Macroprudential approach: The Bank of Algeria will focus on systemic risk surveillance, using stress tests to assess the stability of the banking and financial system.
• Improved allocation of credit: The bank will review financial soundness indicators and conduct further analyses to improve credit allocation to support national economic diversification.
• Intensified information exchange: Authorities in the financial sector will refine and strengthen their knowledge of the financial system’s level of resistance to cyclical phenomena, enabling early detection of threats against financial stability.

Commitment to Financial Stability

The Bank of Algeria has demonstrated a strong commitment to enhancing financial stability through improved risk management, enhanced legal frameworks, and increased transparency.