QCB chief warns of fallout from Europe’s debt crisis

The debt crisis crippling countries in the eurozone will have an indirect impact on the GCC financial sector, Qatar Central Bank Governor HE Sheikh Abdullah bin Saud al-Thani warned yesterday.

Addressing a symposium organised by the Qatar Financial Center Regulatory Authority (QFCRA) Sheikh Abdullah said the policies of Gulf Co-operation Council were aimed at guaranteeing the sectors stability and boosting confidence in the market.

The focus of the event was financial risk management in the GCC in response to the global financial crisis. Central bankers, regulators and senior risk professionals from across the banking, insurance and asset management sectors in the region were attended.

Sheikh Abdullah said GCC policies succeeded in encouraging investors and revitalising the markets. However the road is still “long” for the financial institutions to reach the pre-2008 investor confidence levels, he said.

Sheikh Abdullah dwelt up on a number of initiatives by the QCB, especially the Qatar Credit Information Center (QCIC). He said the centre’s objective was to enhance transparency and to regulate the market more efficiently. He also pointed to establishment of the risk management authority, tasked with studying systemic risks and recommending policies to counter them.

As a result, risk management has now become a high priority for the banks and other financial institutions in the country, he said.

Sheikh Abdullah referred to the latest International Monetary Fund report which said the widening sovereign spreads led to increased risks, especially at the macroeconomic level. This has led to slow progress in developing medium-term fiscal consolidation, which has worried the markets.

Sheikh Abdullah stressed the importance of raising awareness about risk management and the significance of inspiring confidence in the financial sector. This can be achieved by effective regulations and periodical analysis of the markets, he said.

A QFC statement yesterday said while effective risk management practices have been examined extensively at a number of international venues, the symposium was one of the first to address issues more specific to the Gulf region.

“The QFC Regulatory Authority is continuing to strengthen its ability to identify emerging macro prudential risks to the financial sector,” chairman Phillip Thorpe said. “The symposium demonstrates both the QFCRA’s proactive approach to addressing risk across the financial sector and Qatar’s determination to be a regional leader in risk management best practices,” he added.