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Case Studies | Finance | Tunisia | Volume 8 Issue 8, August 2019 | Rating: 7.2 / 10

Scoop on Tunisian Banking System Vulnerabilities and Monetary Policy Features after the Financial Crisis and Political Instability

Salha Ben Salem

Abstract: This article describes and analyzes the evolution of the main economic and monetary aggregates of the Tunisian economy after the financial crisis and the political instability of January 2011. In addition, it interested to present the different risks suffered by the bank system during and after these two crises and to identify whether the monetary policy is optimal to mitigate these weaknesses. We suggest first to study the evolution of economic performance during and after these crises. Second, we analyze the impact of the economic recession on the Tunisian banks’ overall strength and liquidity. Ultimately, we focus on the effectiveness of the monetary policy during these crises. The results suggest that Tunisian banks have been very touched by the revolution’s disturbance particularly, at the level of risk-taking and liquidity mismatch. The analysis of monetary policy, showing that it has evolved from an accommodating policy, going from a neutral monetary policy to a restrictive one, by using the key interest rate as well as reserve rates as monetary policy instruments.

Keywords: Macroeconomic Performance, Banking System Vulnerabilities, Monetary Policy Conduct

Edition: Volume 8 Issue 8, August 2019,

Pages: 1744 - 1749