A quarterly composite measure of stress in the Libyan banking sector — computed from original Central Bank of Libya publications and SANAD-verified bank financial statements, published with its full series and methodology.
Each component is a percentile rank against its own history — a component reading of 70 means more stress than in 70% of observed quarters for that signal. The index value is the weighted average of those component scores. It does not measure crisis probability — only where current conditions sit relative to the available history.
The four bands (calm, elevated, high, severe) are fixed 25-point cuts that aid reading only — not calibrated crisis thresholds. No Libyan default history exists to calibrate a crisis threshold against, and we will not invent one.
When a quarter lacks sufficient data (below 60% of component weight, or fewer than 4 observations for a component), the index refuses to compute and the quarter shows as a gap — no estimation, no interpolation. The gap is itself information.
| Component | Weight | What it measures |
|---|---|---|
| Asset quality stress | 25% | Sector non-performing loan ratio — the direct credit-loss signal. |
| Capitalisation stress | 20% | Sector capital adequacy ratio — thinner buffers over the CBL 12% floor mean more stress. |
| Liquidity & funding stress | 20% | Quarter-on-quarter customer-deposit momentum — outflows or stagnation signal funding stress. |
| Profitability stress | 15% | Quarter-on-quarter net-profit momentum — earnings are the first buffer against losses. |
| Bank divergence stress | 20% | The spread between the strongest and weakest banks (capital and asset quality) across SANAD-verified statements — widening divergence is early systemic stress that sector averages hide. |
Weights are expert judgments adopted under the methodology (version 1.0) and will be re-estimated statistically once the computed history reaches 20 quarters or more. Any change to components, weights or bands is a methodology decision, announced with a new version number.
The index takes the direct structural approach: it is built from balance-sheet and supervisory data rather than market prices, because Libya has no liquid equity or debt market and no active interbank market from which price-based stress signals could be derived. This approach is internationally established for markets where liquidity is thin even in normal times.
Each component is converted to a 0-100 stress score via a mid-rank percentile against its history up to that quarter only — the backfilled series never uses later information. Momentum is computed only between genuinely consecutive quarters and is never bridged across data gaps.
The index is the weighted mean of available component scores, re-weighted over the components actually present. If a source series is revised or corrected, the whole series is recomputed from the corrected data — no index values are stored; the engine recomputes from the source data on demand, and this page picks up changes within the hour.
Sector inputs are transcribed from original Central Bank of Libya publications with the source recorded on every value; the bank-divergence component is computed across SANAD-verified bank financial statements. Quarters with insufficient data are refused, never estimated.
The SANAD Banking Stress Index is not a credit rating and not a credit opinion on any individual entity; it does not constitute a recommendation to buy, sell or hold any security, nor investment or financial advice.
The index is updated quarterly, following the release of Central Bank of Libya data. Version 1.0 — adopted 2026-07-14.