Furthermore, within the larger prerogatives scope provided by the 2010 law, encompassing the functioning, surveillance, and security of the payment systems, the Bank of Algeria is currently updating the payment systems infrastructure (real-time gross settlement system for large value payments and urgent payments and clearing system) established in 2006, in line with international standards. The completion in 2014 of the modernization of the existing credit bureau and the establishment of a new infrastructure for the development of a broader credit bureau will provide an important tool to monitor credit risk as of the second half of 2015. 4  BIS central bankers’ speeches  The new risk-based, forward-looking supervision approach will be focusing on the banks’ credit allocation process in order to avoid the reemergence of credit risk concentration. Anchored within a framework of strengthened stability, the deepening of the financial sector reform as of 2014 will form the basis for a better allocation of national savings to foster productive investments and financing of nonhydrocarbon inclusive and job-creating growth, that is less dependent on the budget and is driven by SMEs development. In this regard, a series of recommendations has been formulated at the end of 2012 by a working group chaired by the Bank of Algeria, with a view of improving the financing of SMEs development, especially through better access to credit and banking services. These efforts should be sustained. For their part, banks are expected to diversify their SMEs financing tools, while continuing to improve the assessment, analysis, and management of credit risks.
The public banks restructuring cost, in terms of non-performing loans repurchased by the Treasury (excluding interests owed by the Treasury, materialized in bonds), accounted for 2.38% of GDP for the decade 1991–2000. For the same period, when including the amount of foreign exchange losses and interest rate spreads paid by the Treasury on account of public banks earlier external borrowing to support the balance of payments, the overall cost reached 3.26% of GDP. BIS central bankers’ speeches  1  Improvement in public finances during the 2000s enabled further restructuring of public banks’ balance sheets, with part of the NPLs consisting this time of bad loans to the private sector. For the period 2001–2010, repurchases by the Treasury through issuance of securities, essentially with regard NPLs to public enterprises, reached about 1.30% of the decade’s GDP. Finally, in 2011–2012, repurchase by the Treasury of loans to public and private enterprises accounted for 235.7 billion dinars, representing 0.77% of GDP. Along with NPLs repurchase operations, public banks received financial support from the Treasury to increase their equity capital. The overall amount in this regard reached 238.8 billion dinars, of which 107.7 billion dinars in cash and 131.1 billion dinars in equity securities. Part of these securities was subsequently repurchased by the Treasury, bringing their outstanding amount to 56.2 billion dinars by end 2010. It is worth noting that, during the 2000s, public banks provisioned significantly and benefitted from additional financial support from the Treasury to further increase their equity capital.