الخميس، 28 فبراير 2013

Opinion: Restructuring #Libya’s financial sector

By Dr Abdalla Kablan, EXANTE
Tripoli, 28 February 2013:
Despite all the security and political challenges facing Libya, the economic outlook for the country is bright and positive going forward into 2013. The recent transformation of Libya’s political situation has opened up the possibility for the restructuring of many of the country’s vital sectors, and the financial sector is sure to capitalise from this.
Globally the world has recently witnessed a major financial crisis that has caused political and economic turmoil. This crisis was caused by a series of bad decisions that were taken by financiers that did not take in consideration the complex nature of financial markets and did not follow a scientific approach in their chaotic decision-making process.
Modern financial systems have been created and are constantly being updated, using various scientific approaches to avoid the previous mistakes that were created by the financial crisis, and to resolve any current problems.
The role of science and technology has become very apparent as a crucial tool in modern financial systems. For instance, the advance in computational power over the past decade has had a dramatic impact on financial research, banking operations, and related regulations. Due to this increase in computational capacity and respective automation of financial markets, an increasing number of financial institutions and exchanges has now created databases that contain all the valuable information of the markets, presented in an easy and accessible manner.
The availability of these databases has boosted the development of a number of new areas of financial research. These can help in optimising the current products that are on offer, in order to avoid any unnecessary losses.
As a result, efficient new forms of financial trading have emerged as important trends in financial engineering. This has created faster paced financial trading where prices are analysed, second-by-second, and buy, sell or hold decisions are systematically taken in real-time.
With a population of just over six million, Libya has excellent financial resources to embark on economic transformation, supported by a young, driven and enthusiastic population eager to achieve independence and economic prosperity. Libya’s economic well-being will only come about through the consolidatiion of democratic values, inclusiveness, transparency, education and accountability.
Libya is now in a unique position for restructuring. The financial industry here needs to adapt to new trends and train its personnel on the new forms of financial trading using these new scientific measures.
Computational Finance, for instance, is an interdisciplinary field that combines many scientific areas such as mathematical finance, numerical methods, artificial intelligence and computer simulations, to enable intelligent trading and facilitate the risk management of process. This will help in understanding and developing new innovative applications of soft computing,  to enhance the prospective services that the financial industry in Libya can provide. Libya is well-positioned to use its wealth, unique economic situation and its appetite for development to embark on a nationwide campaign of restructuring its financial sector, fully using latest technologies to allow it to rapidly evolve, and potentially turn into a major financial centre in the long term.
Libya is clearly at a major historical crossroads. In order for it to exploit modern technologies fully, many factors need to be considered, including restructuring the country’s overall infrastructure, regulatory framework, and human capital.
This means that ultimately it is up to the Libyan people and Libyan governments (present and future) to develop the country into a vital financial centre in the region.
Libya is now in a position to choose between using all of its potential or settling for a wealthy consumer’s role that uses of other financial centres around the world, many of which have proven thanks to the recent financial crisis to be far from flawless.
 The opinions contained in this article do not necessarily reflect those of the Libya Herald.

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