ABU DHABI – Banks in the Gulf Cooperation Council (GCC) member states should introduce new regulations to ensure smooth management of liquidity and credit risks as well as to fully comply with the Basel III requirements, United Arab Emirates (UAE) top banker said Friday.
Sultan Al-Suwaidi, UAE’s Central Bank Governor, said banks in the six GCC countries should introduce new "financial tools like sukuks, securities and treasury bonds in order to address future challenges because unlike their European counterparts, the GCC countries do not have all banking tools because they are new to this field." Al-Suwaidi was speaking to reporters on sidelines of a meeting of the Committee of Governors of Monetary Agencies and Central Banks in the GCC which was held Friday.
Al-Suwaidi, addressing the Committee meeting, said the Arab Gulf countries maintained ample liquidity and have the resilience to address challenges triggered by crises.
He ruled out negative impacts the GCC countries could face as a result of the financial woes in the euro zone, calling for transparency and sharing of information among banks in the GCC countries – Kuwait, Saudi Arabia, Qatar, Bahrian, UAE and Oman.
Al-Suwaidi, in his remarks to reporters however, said the committee members discussed financial and monetary supervision and control, and anti-money laundering.
Banks in the GCC countries have huge funds with regards to Tier I Capital of Basel III, he said, "However liquidity will remain the daunting challenge before implementing the Basel III."
"Banks need to adopt a flexible policy on liquidity risk management and to introduce principles of institutional control where a sound percentage of liquidity is kept for survival during crises at all times," he said.
The global financial crunch has given birth to a new reality which requires a review of credit risks from the angel of available revenues of the borrowers against the size of loans they intend to take," said Al-Suwaidi. – KUNA