Kuwait banks can with­stand chal­lenges

CBK con­fi­dent

Arab Times - - FRONT PAGE -

BEIRUT, Feb 13, (KUNA): Kuwait bank­ing sec­tor is solid and ca­pa­ble of with­stand­ing do­mes­tic or ex­ter­nal fi­nan­cial chal­lenges that might have im­pacts on na­tional econ­omy, the Arab Gulf coun­try’s top banker has said.

“The history of the bank­ing sec­tor in Kuwait re­flects its abil­ity to con­fronting dif­fer­ent chal­lenges, en­abling it to over­come con­se­quences of global fi­nan­cial cri­sis in 2008 ... when many coun­tries around the world suf­fered huge losses be­cause they wanted to res­cue their banks, which was a bur­den on their bud­gets and thus im­pacted cit­i­zens’ liv­ing con­di­tions,” said Dr Mo­ham­mad AlHashel, Gover­nor of the Cen­tral Bank of Kuwait (CBK).

He was speak­ing in an in­ter­view with “Al-Bayan,” a monthly Le­banese magazine spe­cial­ized in banks, in­surance and freight in the Mid­dle East.

CBK, he added, im­ple­mented a policy en­abling na­tional banks to with­stand ram­i­fi­ca­tions of oil prices’ nose-dive in the sec­ond half of 2014.

“The bank­ing sec­tor, based on CBK’s poli­cies, con­tin­ues its ser­vice of the na­tional econ­omy with high ef­fi­ciency,” to ul­ti­mately con­trib­ute to ad­dress­ing the state bud­get deficit, said Al-Hashel.

He cited a 2017 report by the In­ter­naitonal Mone­tary Fund (IMF) that af­firmed Kuwait’s bank­ing sec­tor was im­ple­ment­ing wise reg­u­la­tions put in place by CBK, which strength­ened su­per­vi­sion and man­age­ment.

Kuwaiti banks, ac­cord­ing to IMF report, were fol­low­ing Basel III that was based on a set of re­forms de­signed to im­prove reg­u­la­tion, su­per­vi­sion and risk man­age­ment.

Al-Hashel said an­other IMF report, is­sued in March 2019, wel­comed solid foun­da­tion of Kuwait bank­ing sec­tor and com­mended CBK’s man­age­ment and su­per­vi­sion reg­u­la­tions.

Credit rat­ing agen­cies, like Fitch and Moody’s, also com­mended CBK’s reg­u­la­tions which con­trib­uted to strength­en­ing fi­nan­cial con­di­tions of lo­cal banks.

Al-Hashel was asked about growth and job creation, and said the gov­ern­ment of Kuwait had adopted a set of fi­nan­cial and eco­nomic re­forms aimed at boost­ing growth and creat­ing jobs.

“This aims at di­ver­si­fy­ing econ­omy and pro­mot­ing pri­vate sec­tor to play a fur­ther role in eco­nomic ac­tiv­i­ties,” said Al-Hashel.

“Hav­ing a greater in­volve­ment of the pri­vate sec­tor will ease bur­den on state bud­get. This can hap­pen through pri­va­ti­za­tion and es­tab­lish­ing gen­uine part­ner­ship be­tween the pri­vate and pub­lic sec­tors,” he said.

He called for im­prov­ing qual­ity of education and training to meet pri­vate sec­tor’s de­mands.

De­vel­op­ment of pri­vate sec­tor’s role, di­ver­si­fy­ing econ­omy and sup­port­ing SMEs will cer­tainly pro­mote growth, said the CBK Gover­nor.

Al-Hashel, mean­while, said CBK’s next five-year strat­egy aimed at ce­ment­ing mone­tary and fi­nan­cial sta­bil­ity, in ad­di­tion to en­sur­ing safety and strength of bank­ing sec­tor.

CBK also seeks to main­tain sta­bil­ity of the ex­change rate of the lo­cal cur­rency, Kuwaiti Di­nar, and man­ages in­ter­est rate in line with na­tional econ­omy and in­ter­na­tional in­ter­est rates, with the ob­jec­tive of hav­ing sus­tain­able growth, he said.

The cen­tral bank, said AlHashel, was en­forc­ing strict su­per­vi­sion mea­sures in line with in­ter­na­tional stan­dards, de­vel­op­ing in­fra­struc­ture of in­for­ma­tion tech­nol­ogy to fa­cil­i­tate clear­ing op­er­a­tions, de­velop hu­man re­sources and us­ing tech­nol­ogy to fur­ther im­prove su­per­vi­sion.

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