DOHA: Qatari financial market is equipped to absorb the impacts of any possible market shocks sent by the eurozone crisis and the country's regulatory authority has taken a number of initiatives to manage risk in the market, Qatar Central Bank (QCB) Governor Sheikh Abdullah bin Saud Al Thani said.
Delivering the opening address at the QFC Regulatory Authority symposium on GCC Risk Management here yesterday, Sheikh Abdullah said :"GCC economy is not immune to the impacts of a prolonged euro debt crisis. But Qatar has put in place the necessary policies to infuse confidence in the market".
The Central Bank Governor discussed a number of initiatives taken by QCB for the better management of risks. This include the establishment of Qatar Credit Information Center (QCIC) in March 2011.The idea behind launching the Centre was to enhance transparency and to regulate the market more efficiently. The establishment of risk management authority, which is supposed to monitor the systemic risks and recommend policies to counter them, has helped reinforcing the stability of Qatar's financial market, he said.
Sheikh Abdullah said the risk management is now a high priority on the list of different Qatari banks and other financial institutions in the country. The Central Bank is making efforts to put in a new order for effective risk management.
The ongoing economic turbulence throws enough hints that the world might have to face another round of financial crisis. The latest International Monetary Fund (IMF) report said that the widening sovereign spreads led to increased risks, on the macroeconomic level in particular. This, in turn, led to insufficient progress in developing medium-term fiscal consolidation, which caused more worry in the market.. Sheikh Abdullah stressed the importance of raising awareness about risk management and underlined the key significance of inspiring confidence in the financial sector. He said that this can be achieved by constant regulating and periodical analysis of the market.
The QFC Regulatory Authority Chairman Phillip Thorpe said that the world has been experiencing a severe dislocation in financial markets and high levels of volatility over the last three years.
"While we can be grateful that the GCC region has escaped the worst effects of the global economic slowdown, its institutions have not been immune-nor will they remain protected from financial stress going forward. Moreover, despite the many regulatory reforms at both the international and national level, financial institutions and financial markets remain vulnerable to unexpected shocks. As a result, traditional approaches to risk management are being challenged, and risk methodology is in a process of revision and upgrading," he said.
Central bankers, regulators and senior risk professionals from across the banking, insurance and asset management sectors in the region attended the symposium. The topics for the Symposium included containing the spread of global financial risk in the GCC, key macro-prudential developments in the region and the benefits and challenges of implementing the Basel III Directive in the GCC.
© The Peninsula 2012
