Banking Supervision in Liberia: How Adequate and Effective?

Supervisory approach, techniques, reporting and disclosure and the legal authority of supervisors are significant requirements for effective and efficient financial institutions' supervision. These methodologies outlined the responsibilities of a bank's management and board as well as the operational independence of the supervisors. The New Financial Institutions Act 1999 and the Central Bank Act 1999 conferred power on the CBL to establish methodologies for supervising financial institutions that will ensure stability in the financial sector. The CBL has authority to grant and revoke financial institution's license, ensure that financial institutions are conducting their business operations in accordance with the prudential regulations and other applicable laws. The bank supervision methodologies established by the CBL followed international standards such as BCBS Core Principle Methodology. The CBL supervisors have adequate power, at least theoretically, to ensure a stable financial system.