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This article examines the nature of financial reforms undertaken in Algeria and their results in terms of financial services competitiveness. We analyze the trend of indicators of the deepening of the banking sector, particularly bankarization and credit in favor of the private productive sector and trends of real interest rates and of bank profitability, in turn based on the trends of the bank margins, their intermediation margins and the return on assets (ROA) or return on equity (ROE). We also introduce the aspects of banking governance and prudential regulation, which we analyze through the conceptual framework proposed at Basle.
We review the strategies adopted by Algerian banks, with the aim of improving their efficiency, be it through a process of privatization of the public banks in which the State holds majority shares or through strategies for opening up and strengthening regional cooperation. Lastly, we measure the competitiveness of Algeria’s banking sector and test the conditions for the system’s competitiveness, with and without the bank restructuring.