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The Undergraduate Research Journal

Abstract

Banking reform is a fundamental branch of economic development that has frequently been used by policy-makers in attempts to stimulate the Egyptian economy. The Central Bank of Egypt (CBE) has a major role in improving the performance of the Egyptian Banking sector. In order to achieve its goal, it has had to increase its strength by passing new banking laws in cooperation with the Egyptian government. These laws include reforms in the systems of banking management, eliminating bureaucracy, encouraging transparency, privatization of banks, modernizing the Egyptian payment system, inter-bank transactions, supervising the performance of banks, and achieving a higher degree of independence of the CBE. These new banking laws, in particular Law No. 88 of the year 2003, that have been introduced by the economic group are a step forward towards improving the performance of the Egyptian banking sector. Economic reform policies have become an integral part of nations’ economic development programs. Egypt, classified by the World Bank as a developing country, has suffered from deteriorating economic conditions over the past thirty years. Throughout Egypt’s economic downturns, it has witnessed a number of economic booms that have pushed the economy slightly forward. Banking reform is a fundamental branch of economic development that has been frequently used by policy-makers in attempts to stimulate the Egyptian economy. Since the beginning of the implementation of the open-door policies in Egypt, implemented by former Egyptian President Sadat, by which trade was liberalized and markets made open to free trade and competition, banking reform has been used extensively and has resulted in major improvements in the economy. The Unified Banking Law (Law No. 88 of the year 2003) consists of over 130 articles that set regulations that must be followed by banks operating in the country in order to improve the performance of the banking sector in Egypt. Since the introduction of the law by the new economic group, members of the economic and business sectors have discussed its pros and cons extensively in an attempt to discover the feasibility of the positive effects promised by the government. In addition, people have questioned whether this new law has given the Central Bank of Egypt (CBE) its full independence or merely the appearance of autonomy on paper.

Document Type

Research Article

Department

Economics Department

Institutional Review Board (IRB) Approval

Not necessary for this item

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