11th GCC Banking Conference

November 10th, 2013 by Stephen Jones Leave a reply »

The two-day 11th GCC Banking Conference on the “Role of the GCC Banking Sector in
Supporting GCC Economies
”, held in the City of Abu Dhabi, UAE concluded last week with a Press
Conference headed by H.E. Sultan Bin Nasser Al Suwaidi, Governor of the Central Bank of the UAE. Senior officials of the Central Bank were also present.

H.E. the Governor opened the press conference by providing a summary of the working
sessions of the Conference. The Governor answered questions addressed by the Press
regarding a number of banking and monetary topics, notably:

- The New Mortgage Loans Regulation
- The forthcoming Large Exposures Regulation and its components
- The forthcoming liquidity regulations
- The Macro-prudential policy
- The policy of opening branches of national banks in other GCC member countries
- Impact of the new Mortgage Loans Regulation on growth of the real estate sector
- SME financing program in the UAE
- Provisioning policy at banks operating in the UAE
- Regulations governing Islamic banks
- MOUs regarding Currency Swap Agreements signed with China and South Korea
- The forthcoming Financial Services Law

Earlier this year the IMF 2013 Article IV Consultation with United Arab Emirates press release stated:

The implementation of planned prudential regulations will help mitigate the risk of a build-up of banking sector vulnerabilities. With significant capital and liquidity buffers, banks show substantial resilience to shocks. Building on this strength, it will be important to preempt the build-up of new vulnerabilities. Swift implementation of the planned new prudential regulations for mortgage lending and loan concentration would mitigate the risk of rapid credit expansion and undue loan concentration to the real estate and GRE sectors in the future. These policies should be complemented by developing a more formal and transparent macroprudential institutional and policy framework. The proposed new Financial Services Law provides an opportunity to establish the legal base for such a framework. Developing the domestic fixed income market would support banks’ liquidity management as they prepare for the introduction of the Basel III liquidity norms, and would help the diversification of funding sources for corporates. The planned assessment under the Financial Sector Assessment Program (FSAP) will be a welcome opportunity to review the financial sector’s strengths and weaknesses. This assessment would also be a suitable occasion to conduct a review of the UAE’s Anti-Money Laundering/Combating the Financing of Terrorism policies.

It is good to see the conference addressing these matters in a timely manner – both for the good of the banking sector and for the U.A.E.

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