Economist Mohamed Abusnina considered the symposium held by the Central Bank of Libya on banking investment to be nothing more than an attempt to push through the idea of establishing a banking holding company. This company would include public commercial banks with a contribution from the Central Bank and would be responsible for establishing a public investment bank, financing funds, and a financial leasing company, under the pretext of directing bank funds toward financing economic development.
Criticism of the Holding Company Idea
In exclusive statements to “The New Arab” website, Abusnina said that the holding company idea is based on a false premise, which assumes that commercial banks have failed to support development despite their abundant liquidity. This comes without a historical analysis of their role over the past decades or a review of the data on loans and financing they provided to projects before 2011, a period that witnessed extensive contributions from commercial banks in financing the productive and service projects relied upon by successive governments.
A Call for Comprehensive Structural Reform of the Banking Sector
Abusnina criticized the disregard for the exceptional, legislative, and economic conditions under which Libyan banks currently operate, noting that true reform must begin with restructuring the banking sector. This includes the Central Bank exiting its ownership of commercial banks, strengthening banking supervision, and amending Banking Law No. (1) of 2005 to allow for the expansion of private sector ownership and to improve the efficiency of management and governance.