The Treasury has told American banks to closely monitor transactions that may be related to unrest in Libya for any possible signs that state assets were being misappropriated.

The advisory issued late on Thursday by the Treasury's Financial Crimes Enforcement Network stopped short of freezing assets or imposing other financial sanctions on Libyan leader Muammar Gaddafi or other senior officials in his regime.

The advisory is similar to the Treasury's recent requests for increased scrutiny of transactions related to the ouster of leaders in Egypt and Tunisia.

It asks institutions to apply enhanced scrutiny to any private banking accounts held by or on behalf of senior political leaders in Libya, but did not mention Gaddafi by name.

Banks should monitor transactions that could potentially represent misappropriated or diverted state assets, proceeds of bribery or other illegal payments, or other public corruption proceeds, the Treasury enforcement agency said.

Financial institutions should be aware of the possible impact the events in Libya may have on patterns of financial activity when assessing risks related to particular customers and transactions, it added.

(Reporting by David Lawder; Editing by Theodore d'Afflisio)