Conceptions of capital, corporate governance and financial supervision in systemic risk mitigation: towards an integrated approach for Libya

This thesis explains the divergent dynamics of capital adequacy, corporate governance and financial supervision in mitigating systemic risk within financial markets and places particular emphasis on Libya. The doctrinal nature of the research is based on the analysis of legal frameworks, international regulatory standards, and financial oversight mechanisms within the context of the changing global regulatory environment. Drawing on case studies from major financial crises, including the 2008 global financial crisis and the Eurozone debt crisis, the study pinpoints systemic risk vulnerabilities that financial globalisation, market interconnectivity, and regulatory fragmentation have opened up. The central argument presented is that the mitigation of systemic risk necessitates a holistic and integrated approach that aligns the regulation of capital with imperatives of corporate governance and prudential supervision. The study critically analyses international standards, including the Basel Accords, the role of the FSB, and the implementation of macroprudential policies called into being by new developments in international markets, to appraise their efficacy for financial stability. Particular attention is given to the financial system of Libya, where institutionally fragile regulatory gaps are increased by political instability. The thesis underlines the need to adopt an adaptive legal framework that incorporates international best practices while addressing the unique economic and financial constraints facing Libya. The findings suggest that the enforcement of formal reform in financial governance in Libya is indicated, including the mechanisms for corporate governance that improve institutional accountability, risk-based capital adequacy with a home market focus, and supervisory regime against new risks, especially those from financial innovation and FinTech expansion. Therefore, the contribution to systemic risk could be achieved in discussions on the formulation of a more dynamic, multilevel national financial stability regime compatible with modern international regulatory requirements in Libya, for a safer global financial architecture.