Governor of the Saudi currency: moving steadily towards a single Gulf currency and Jasser expected recovery of the global economy with cautious optimism
June 7, 2011: The governor of Saudi Arabian Monetary Agency (central bank) said that the current outlook for the global economy imply that the global economy continues to recover gradually from the effects of the financial crisis, which is dominated by cautious optimism, with some forecasts positive growth in most countries of the Group of Twenty .
He stressed that work is continuing for the Gulf monetary union standard, and through the schedule to it, pointing out that the project is a historic and important, and there is political commitment, social, and walking a steady pace, confirming that the project was a technical first-class, spoiled on the European currency and its consequences, as in Currently, how the commitment of European countries in the debts of a member of the currency, pointing out that the errors of European countries learn from the Gulf States .
The Muhammad Al Jasser, Governor of Saudi Arabian Monetary Agency to that in the United States, the economy is recovering in a moderate pace, and remains the economic conditions in Japan are in a recession, while facing several countries in Europe daunting challenges in public finance with the worsening problem of public debt to each other. While emerging economies continue to play the role of the main engine of global economic growth. And Al-Jasser, the latest estimates of the report of the prospects for the global economy, indicating that real GDP will go down in the global growth of 4.5 per cent in 2011 and 2012, compared to a growth of 5.0 per cent in 2010, after a sharp recession in 2009 .
He emphasized that the continuing rise in food prices and commodities constitute a challenge to economic recovery, which is expected to reach levels of inflation of 2.2 per cent in developed countries and 6.9 per cent in developing countries in 2011, with an expected decline in 2012 to 1.7 per cent and 5. 3 per cent respectively .
Jasser was speaking during a seminar held in the Saudi capital Riyadh the day before yesterday, organized by the Saudi Economic Association, attended by a number of government officials and members of the Assembly .
Said Al-Jasser: «I’ve had to emerging countries, including the UK, an active role in achieving growth in the global economy, it has made these economies grew by 7.3 per cent in 2010 and is expected to achieve 6.5 per cent in 2011, and this is due to fiscal and monetary policies pursued and the policies of control and supervision of financial institutions ».
He added: «The economic outlook Saudi Arabia in 2011, encouraging and very positive, the government continued to pursue a fiscal policy for dealing with cyclical economic by announcing a budget aimed at continuing to achieve sustainable growth, and the reality of the balance sheet of the State, is expected to increase spending 40 billion riyals and the achievement of inability of the same amount. In addition, the government announced in early 2011 special allocations of 91.3 billion riyals ($ 24.3 billion) of budget surplus in 2010, and distributed to the vital sectors in various regions of the Kingdom to promote the continued growth and development ».
He pointed out that the Kingdom recorded a real growth in GDP of 4.1 per cent in 2010, and expects a rate of 4.3 per cent in 2011, but pack the decisions taken by the Custodian of the Two Holy Mosques recently to strengthen the purchasing power of citizens and increase investment in housing and health may pay to higher estimates of growth to about 6 per cent for the current year .
The Jasser that «all the global financial crises that have occurred were the result of incentives is appropriate encourages risk-taking that characterized the dangers of excessive, and are these incentives are usually in the large expansion in the delivery of credit, is the recent crisis without unprecedented in terms of speed and unity of its consequences. And this crisis has been characterized by the presence of a limited group of financial institutions with the great importance of the financial system, which it considered too big to fail ».
He continued: «Given what happened in the global financial markets, we can say that the main pillars upon which the financial markets were weak and fragile, especially in regard to the issue of lax banking supervision and the adoption of some banking institutions in the budget on excessive lending, coupled with the conditions of an expansionary monetary of the Group of Seven, and a lack of rating agencies. It was assumed from the makers of financial policies and regulatory and supervisory boards of financial institutions, accountants, auditors and rating agencies .. In their respective fields, to act as lead to the development of financial markets and the stability and maintain their credibility and integrity ».
He stressed that the «Saudi Arabia is an active member in the group of twenty in terms of their importance and role of influential in the global economy, where is the largest Arab economy, and has the largest reserves of oil in the world and surplus production capacity with which it can compensate for any lack of surprise in oil supplies, the Kingdom is committed to the initiatives of the group that aimed at enhancing the resilience of the global financial system ».
He stressed that his country remained as an emerging market, is heavily influenced by the global financial crisis as a result of regulatory policies and conservative prudent precautions that have been followed over several decades. It is noted that the supervisor is the global standard-setters are now starting in the dissemination of new standards and follow the precautionary regulatory approach is more conservative and prudent .
He stressed that the Saudi Arabian Monetary Agency is keen to adopt a proactive stance regarding the implementation of recent regulatory developments and best practices for enhancing the resilience of banks and the banking system, which helps to continue to work according to the method of evaluating the potential risks .
He stressed that he pointed out years ago to the economic policy pursued by the Kingdom is based on the idea of the face of fluctuations in economic cycles in order to reduce the effects of fluctuations and maintain stability in the economy in case of boom and recession in the Kingdom whose economy depends largely on the supplier of commodities to one subject to large fluctuations in oil markets World .
He pointed out that «Saudi Arabia faces a challenge specific and clear is how to make optimum use of oil revenue inflows volatile in order to develop its economy and provide job opportunities decent for the Saudi youth, and there is interest in these days at the global level by following the same policy, and demand for the allocation of reserves to support the capital and the allocation of reserve for loans to meet the fluctuations in the economic cycle ».
He pointed out that it was a major effort in the «Basel Committee» Council and financial stability to study this subject, was the adoption of principles to address the effects of fluctuations in the economic cycle on the financial sector. In this regard, the Foundation topped the list again, because it encouraged Saudi banks to take advantage of a growing economy during the period from 1991 to 1997 to mobilize the capital of new and used locally to increase the reserves of capital. As a result, increased the capital of the banking system during that period by 100 per cent .
He continued: «repeat this success of the process during the period from 2003 until 2007, when the banks capital by 240 per cent, which is no doubt that this contingency provision of additional capital had been very useful during the later periods of economic slowdown and the emergence of the consequences of global and regional events last» . He added: «Similarly, in the allocation of reserves for loans, exercised the Saudi banks have a policy of confrontation fluctuations in the economic cycle by increasing the ratio of allocation reserves have non-performing loans by high reached 202 per cent in 2005, and then reduced to 89 per cent by the end of 2009 , and reached the end of March (March 2011) 18 per cent ».
He stressed that the Saudi Arabian Monetary Agency central banking and destination control of an emerging market, is keen to introduce global standards of appropriate financial systems, but is concerned about the developed markets that caused the global crisis, which may not apply those standards in a timely or comprehensive manner .
He emphasized that it is now clear that financial stability requires a focus on all the risks associated with financial institutions and risks in the financial system in general and on both, and that the primary task of the financial sector is to support the real economy .
He pointed out that the Foundation believes in the importance of coordination and harmonization significantly between regulatory policy and oversight at the State level to prevent excessive speculation that may occur as a result of differences in regulatory policy and oversight between the States, but that such coordination is better than having a regulatory authority of a global financial .
He stressed that the efforts undertaken by the Group of Twenty gives great hope that the agenda of reforms of financial markets, which are working on it now, will be implemented fully in accordance with the timetable that is being followed up carefully and consistently, and most importantly it is the hope that the re-fixes the normal position and proper to the global financial markets to return to work effectively to meet the needs of both customers and service the real global economy. He pointed out that «the Saudi Arabian Monetary Agency have the benefit of a conservative approach and take action and proactive measures lead to the creation rates of strong capital and the allocation of adequate back-up to the banks, and stress tests for banks to indicate that there is now no threats to the domestic banking system», and stressed that « Foundation will continue to exercise regulatory and supervisory policies are coherent and committed to applying international standards to maintain a strong banking system capable of providing the necessary funding to our economy with efficiency with the ability to cope with shocks and unforeseen crises ».
Precautions and Saudi Arabia, said that the risk reduction is the basis for the management of any financial reserves, especially if the reserve of the state and not a financial institution, and not to the person, because to maintain the parent is the biggest concern of the Department .
He continued: «private sector is growing well. Always look forward to growth is greater. I’m not worried on the private sector, but I think that the potential if done better, you can now hiring, employment, or to give Saudi Arabia a greater incentive. Capital in a country like Saudi Arabia reflect the size of the national economy, but is capital in line with the growing economy? It is growing, did not come that growth spontaneously », pointing out that the provisions agreed by the institution with the banks to increase continuously, especially in times of economic improvement, according to the absence of the need to use to cope with the deterioration in the bank governor, become part of the capital
June 7, 2011: The governor of Saudi Arabian Monetary Agency (central bank) said that the current outlook for the global economy imply that the global economy continues to recover gradually from the effects of the financial crisis, which is dominated by cautious optimism, with some forecasts positive growth in most countries of the Group of Twenty .
He stressed that work is continuing for the Gulf monetary union standard, and through the schedule to it, pointing out that the project is a historic and important, and there is political commitment, social, and walking a steady pace, confirming that the project was a technical first-class, spoiled on the European currency and its consequences, as in Currently, how the commitment of European countries in the debts of a member of the currency, pointing out that the errors of European countries learn from the Gulf States .
The Muhammad Al Jasser, Governor of Saudi Arabian Monetary Agency to that in the United States, the economy is recovering in a moderate pace, and remains the economic conditions in Japan are in a recession, while facing several countries in Europe daunting challenges in public finance with the worsening problem of public debt to each other. While emerging economies continue to play the role of the main engine of global economic growth. And Al-Jasser, the latest estimates of the report of the prospects for the global economy, indicating that real GDP will go down in the global growth of 4.5 per cent in 2011 and 2012, compared to a growth of 5.0 per cent in 2010, after a sharp recession in 2009 .
He emphasized that the continuing rise in food prices and commodities constitute a challenge to economic recovery, which is expected to reach levels of inflation of 2.2 per cent in developed countries and 6.9 per cent in developing countries in 2011, with an expected decline in 2012 to 1.7 per cent and 5. 3 per cent respectively .
Jasser was speaking during a seminar held in the Saudi capital Riyadh the day before yesterday, organized by the Saudi Economic Association, attended by a number of government officials and members of the Assembly .
Said Al-Jasser: «I’ve had to emerging countries, including the UK, an active role in achieving growth in the global economy, it has made these economies grew by 7.3 per cent in 2010 and is expected to achieve 6.5 per cent in 2011, and this is due to fiscal and monetary policies pursued and the policies of control and supervision of financial institutions ».
He added: «The economic outlook Saudi Arabia in 2011, encouraging and very positive, the government continued to pursue a fiscal policy for dealing with cyclical economic by announcing a budget aimed at continuing to achieve sustainable growth, and the reality of the balance sheet of the State, is expected to increase spending 40 billion riyals and the achievement of inability of the same amount. In addition, the government announced in early 2011 special allocations of 91.3 billion riyals ($ 24.3 billion) of budget surplus in 2010, and distributed to the vital sectors in various regions of the Kingdom to promote the continued growth and development ».
He pointed out that the Kingdom recorded a real growth in GDP of 4.1 per cent in 2010, and expects a rate of 4.3 per cent in 2011, but pack the decisions taken by the Custodian of the Two Holy Mosques recently to strengthen the purchasing power of citizens and increase investment in housing and health may pay to higher estimates of growth to about 6 per cent for the current year .
The Jasser that «all the global financial crises that have occurred were the result of incentives is appropriate encourages risk-taking that characterized the dangers of excessive, and are these incentives are usually in the large expansion in the delivery of credit, is the recent crisis without unprecedented in terms of speed and unity of its consequences. And this crisis has been characterized by the presence of a limited group of financial institutions with the great importance of the financial system, which it considered too big to fail ».
He continued: «Given what happened in the global financial markets, we can say that the main pillars upon which the financial markets were weak and fragile, especially in regard to the issue of lax banking supervision and the adoption of some banking institutions in the budget on excessive lending, coupled with the conditions of an expansionary monetary of the Group of Seven, and a lack of rating agencies. It was assumed from the makers of financial policies and regulatory and supervisory boards of financial institutions, accountants, auditors and rating agencies .. In their respective fields, to act as lead to the development of financial markets and the stability and maintain their credibility and integrity ».
He stressed that the «Saudi Arabia is an active member in the group of twenty in terms of their importance and role of influential in the global economy, where is the largest Arab economy, and has the largest reserves of oil in the world and surplus production capacity with which it can compensate for any lack of surprise in oil supplies, the Kingdom is committed to the initiatives of the group that aimed at enhancing the resilience of the global financial system ».
He stressed that his country remained as an emerging market, is heavily influenced by the global financial crisis as a result of regulatory policies and conservative prudent precautions that have been followed over several decades. It is noted that the supervisor is the global standard-setters are now starting in the dissemination of new standards and follow the precautionary regulatory approach is more conservative and prudent .
He stressed that the Saudi Arabian Monetary Agency is keen to adopt a proactive stance regarding the implementation of recent regulatory developments and best practices for enhancing the resilience of banks and the banking system, which helps to continue to work according to the method of evaluating the potential risks .
He stressed that he pointed out years ago to the economic policy pursued by the Kingdom is based on the idea of the face of fluctuations in economic cycles in order to reduce the effects of fluctuations and maintain stability in the economy in case of boom and recession in the Kingdom whose economy depends largely on the supplier of commodities to one subject to large fluctuations in oil markets World .
He pointed out that «Saudi Arabia faces a challenge specific and clear is how to make optimum use of oil revenue inflows volatile in order to develop its economy and provide job opportunities decent for the Saudi youth, and there is interest in these days at the global level by following the same policy, and demand for the allocation of reserves to support the capital and the allocation of reserve for loans to meet the fluctuations in the economic cycle ».
He pointed out that it was a major effort in the «Basel Committee» Council and financial stability to study this subject, was the adoption of principles to address the effects of fluctuations in the economic cycle on the financial sector. In this regard, the Foundation topped the list again, because it encouraged Saudi banks to take advantage of a growing economy during the period from 1991 to 1997 to mobilize the capital of new and used locally to increase the reserves of capital. As a result, increased the capital of the banking system during that period by 100 per cent .
He continued: «repeat this success of the process during the period from 2003 until 2007, when the banks capital by 240 per cent, which is no doubt that this contingency provision of additional capital had been very useful during the later periods of economic slowdown and the emergence of the consequences of global and regional events last» . He added: «Similarly, in the allocation of reserves for loans, exercised the Saudi banks have a policy of confrontation fluctuations in the economic cycle by increasing the ratio of allocation reserves have non-performing loans by high reached 202 per cent in 2005, and then reduced to 89 per cent by the end of 2009 , and reached the end of March (March 2011) 18 per cent ».
He stressed that the Saudi Arabian Monetary Agency central banking and destination control of an emerging market, is keen to introduce global standards of appropriate financial systems, but is concerned about the developed markets that caused the global crisis, which may not apply those standards in a timely or comprehensive manner .
He emphasized that it is now clear that financial stability requires a focus on all the risks associated with financial institutions and risks in the financial system in general and on both, and that the primary task of the financial sector is to support the real economy .
He pointed out that the Foundation believes in the importance of coordination and harmonization significantly between regulatory policy and oversight at the State level to prevent excessive speculation that may occur as a result of differences in regulatory policy and oversight between the States, but that such coordination is better than having a regulatory authority of a global financial .
He stressed that the efforts undertaken by the Group of Twenty gives great hope that the agenda of reforms of financial markets, which are working on it now, will be implemented fully in accordance with the timetable that is being followed up carefully and consistently, and most importantly it is the hope that the re-fixes the normal position and proper to the global financial markets to return to work effectively to meet the needs of both customers and service the real global economy. He pointed out that «the Saudi Arabian Monetary Agency have the benefit of a conservative approach and take action and proactive measures lead to the creation rates of strong capital and the allocation of adequate back-up to the banks, and stress tests for banks to indicate that there is now no threats to the domestic banking system», and stressed that « Foundation will continue to exercise regulatory and supervisory policies are coherent and committed to applying international standards to maintain a strong banking system capable of providing the necessary funding to our economy with efficiency with the ability to cope with shocks and unforeseen crises ».
Precautions and Saudi Arabia, said that the risk reduction is the basis for the management of any financial reserves, especially if the reserve of the state and not a financial institution, and not to the person, because to maintain the parent is the biggest concern of the Department .
He continued: «private sector is growing well. Always look forward to growth is greater. I’m not worried on the private sector, but I think that the potential if done better, you can now hiring, employment, or to give Saudi Arabia a greater incentive. Capital in a country like Saudi Arabia reflect the size of the national economy, but is capital in line with the growing economy? It is growing, did not come that growth spontaneously », pointing out that the provisions agreed by the institution with the banks to increase continuously, especially in times of economic improvement, according to the absence of the need to use to cope with the deterioration in the bank governor, become part of the capital