SEPTEMBER 28, 2009, 9:17 A.M. ET
Arab Central Bank Heads Gather In Abu Dhabi
THE EVENT: Arab central bank governors and other officials are gathering in Abu Dhabi for the 33rd round of the Council of Central Bank Governors and Arab Monetary Institutions.
THE SITUATION:At the meeting, central bank officials from Arab countries in the Middle East and North Africa are discussing financial regulations, creating a system for inter-Arab payments and Kuwait's financial stability program.
IN THE BACKGROUND: The meeting, which takes place ahead of the October annual meetings of the International Monetary Fund and World Bank in Turkey, comes against the backdrop of concerns over the recent debt defaults at two prominent Saudi family conglomerates, Saad Group and Ahmad Hamad Al Gosaibi & Brothers Co., or AHAB, which are affecting banks in the Arab Gulf in particular. It is also being held amid ongoing plans by four Gulf Cooperation Council, or GCC, states to launch a common currency at a time when the region is grappling with the fallout from the world financial crisis.
WHAT THEY SAID:
"We have advised banks to up their provisions for half-year results up to 50% for their exposure," Rasheed Al Maraj the Central Bank of Bahrain governor said. "We are satisfied with all the measures taken so far."
There is "no systematic risk on the banking sector in the Saudi economy" from corporate defaults, SAMA governor Mohammed Al Jasser said.
"Thirteen banks are exposed" to Saad Group and AHAB and their respective Bahrain-based units Awal Bank and The Investment Banking Corp., or TIBC, U.A.E. central bank governor Sultan bin Nasser Al Suwaidi said.
The exposure of Omani banks to the Saudi groups is "minimal," Oman's central bank executive president Hamood Al Zadjali said with regard to the three of the sultanate's banks that have exposure to the troubled Saudi conglomerates.
"I believe the global economic situation is still fragile, and this reflects on the local situation," Al Suwaidi said.
"This subject is not currently under discussion," Sultan bin Nasser Al Suwaidi said when asked the U.A.E. would rejoin regional plans to establish a monetary union after its withdrawal earlier this year
"The overall economic situation is now in a better position. There are many positive indicators in the market. I can say our situation is positive," Bahrain's central bank governor Rasheed Al Maraj said.
"The global economic crisis proved a need to have a better monitoring and supervision of financial institutions in the Arab world," Sudan's central bank governor Sabir Mohamed Hassan said.
"These facilities unlike World Bank loans are usually for financial stability," Sinan Al Shabibi, Iraq's central bank chief, said about a financing deal with the International Monetary Fund to be finalized at the group's annual meeting in Istanbul.
"This will bring more confidence to the Syrian banking sector and prepare banks to face tough global economic conditions," Syria's central bank chief Adib Mayaleh said about his country's plans to raise the capital requirement for private banks in the country to $300 million.
-By Dubai Bureau, Dow Jones Newswires; +9714 364 4965; djnews.dubai@dowjones.com
Arab Central Bank Heads Gather In Abu Dhabi
THE EVENT: Arab central bank governors and other officials are gathering in Abu Dhabi for the 33rd round of the Council of Central Bank Governors and Arab Monetary Institutions.
THE SITUATION:At the meeting, central bank officials from Arab countries in the Middle East and North Africa are discussing financial regulations, creating a system for inter-Arab payments and Kuwait's financial stability program.
IN THE BACKGROUND: The meeting, which takes place ahead of the October annual meetings of the International Monetary Fund and World Bank in Turkey, comes against the backdrop of concerns over the recent debt defaults at two prominent Saudi family conglomerates, Saad Group and Ahmad Hamad Al Gosaibi & Brothers Co., or AHAB, which are affecting banks in the Arab Gulf in particular. It is also being held amid ongoing plans by four Gulf Cooperation Council, or GCC, states to launch a common currency at a time when the region is grappling with the fallout from the world financial crisis.
WHAT THEY SAID:
"We have advised banks to up their provisions for half-year results up to 50% for their exposure," Rasheed Al Maraj the Central Bank of Bahrain governor said. "We are satisfied with all the measures taken so far."
There is "no systematic risk on the banking sector in the Saudi economy" from corporate defaults, SAMA governor Mohammed Al Jasser said.
"Thirteen banks are exposed" to Saad Group and AHAB and their respective Bahrain-based units Awal Bank and The Investment Banking Corp., or TIBC, U.A.E. central bank governor Sultan bin Nasser Al Suwaidi said.
The exposure of Omani banks to the Saudi groups is "minimal," Oman's central bank executive president Hamood Al Zadjali said with regard to the three of the sultanate's banks that have exposure to the troubled Saudi conglomerates.
"I believe the global economic situation is still fragile, and this reflects on the local situation," Al Suwaidi said.
"This subject is not currently under discussion," Sultan bin Nasser Al Suwaidi said when asked the U.A.E. would rejoin regional plans to establish a monetary union after its withdrawal earlier this year
"The overall economic situation is now in a better position. There are many positive indicators in the market. I can say our situation is positive," Bahrain's central bank governor Rasheed Al Maraj said.
"The global economic crisis proved a need to have a better monitoring and supervision of financial institutions in the Arab world," Sudan's central bank governor Sabir Mohamed Hassan said.
"These facilities unlike World Bank loans are usually for financial stability," Sinan Al Shabibi, Iraq's central bank chief, said about a financing deal with the International Monetary Fund to be finalized at the group's annual meeting in Istanbul.
"This will bring more confidence to the Syrian banking sector and prepare banks to face tough global economic conditions," Syria's central bank chief Adib Mayaleh said about his country's plans to raise the capital requirement for private banks in the country to $300 million.
-By Dubai Bureau, Dow Jones Newswires; +9714 364 4965; djnews.dubai@dowjones.com