Banking Liquidity Crisis: Libyan Economy Case, Roots, and Causes (2008-2015)

Abstract

The main objective of this paper was to trace the roots of the beginning of the liquidity crisis in the Libyan economy and to try to identify the causes that led to its emergence and its exacerbation. This led to deterioration in the value of the local currency and an increase in the general level of prices. The descriptive statistical method was used in the analysis process, by using the statistical data issued by the Central Bank of Libya (CBL), and the Organization of Arab Petroleum Exporting Countries (OAPEC), for the period from (2008 to 2015). The paper concluded that the roots of the crisis appeared in mid-March (2011), then developed with the exacerbation of the political crisis. The most important reasons that led to that crisis were the following: technical reasons, and financial reasons. Finally, the political and security reasons, all of these reasons, supported the roots of the crisis until it worsened, and became in its current form, and this led to the entry of the economy into a state of monetary panic, and individuals withdrew their bank savings as a result of the loss of confidence in the state apparatus, especially the banking sector.

Keywords: Liquidity risk, Banking liquidity, Credit risk.

Cite This Article: Mohamed I. Ali, 2021, Banking Liquidity Crisis: Libyan Economy Case, Roots, and Causes (2008-2015), Journal of Financial and Economic Research, Accounting Department, University of Benghazi, Vol 6, p45-61.