The Impact of Applying the Central Bank Transparency Code (CBT-Code) on the Level of Disclosure in Financial Reports: A Comparative Analytical Study of the Central Bank of Libya

Abstract

This study aimed to measure the impact of applying the Central Bank Transparency Code (CBT-Code) on the level of disclosure in the financial reports of the Central Bank of Libya by comparing disclosure levels in the pre- and post-implementation periods. The study employed a descriptive-analytical approach and content analysis of annual reports and officially published documents. A checklist consisting of 21 items was developed and distributed across five main dimensions: governance, policies, operations, outcomes, and official relations. The items were coded using a three-point scale (0, 0.5, 1).

The findings revealed that the implementation of the Code significantly improved the level of disclosure, particularly in the areas of governance, policies, operations, and official relations, while the outcomes dimension remained relatively weaker in terms of accounting disclosure depth and the level of detail related to financial instruments, credit risk, and liquidity risk. The overall disclosure index during the post-implementation period reached approximately 81.0%, while the final item-level disclosure index reached 92.9%, indicating a substantial improvement in institutional transparency. The difference between the two indices reflects two different levels of measurement: the former captures overall disclosure during the post-implementation period, whereas the latter reflects completeness of disclosure at the detailed item level.

The study recommends that the Central Bank of Libya expand its accounting disclosure practices in line with international standards, particularly with regard to accounting policies, financial instruments, credit risk, and liquidity risk, in order to enhance the quality of financial reporting and strengthen user confidence.