The report is a joint International Monetary Fund IMF-World Bank Financial Sector Assessment Program (FSAP), which examined Gabon's macroeconomic and financial context, and identified its financial soundness, as well as vulnerabilities. The country's financial sector is overall, profitable and stable, though still relatively underdeveloped. Banks - which dominate the financial sector - find their activities and growth potential, limited by the size of the non-oil economy, given that financing of the oil sector is largely undertaken outside the country. While the government retains a strong role in the financial sector, as owner and as client, through public enterprises, solvency levels in some of the banks are close to the forthcoming regulatory minimum of eight percent (effective in 2004).This risk is enhanced by the banking sector's portfolio concentration. Moreover, fiscal problems have in the past had direct, and indirect negative repercussions on the performance of the financial sector. The report further analyzes the legal, regulatory and supervisory issues, stating the judicial system is deficient, enhancing risks and costs of doing business, including for the financial sector, while the insurance market is for the most part, stagnant, and lacking product innovation. Recommendations for legal and judicial issues include a strengthened framework that enables transparency, including predictability in the disposition of financial sector litigation; and, recommendations for the financial sector development suggest pursuing adequate risk diversification strategies; merging with regional stock exchanges; and, identifying financial mechanisms to establish a micro-finance sector.