Sultan Bin Nasser Al-Suwaidi: Strengthening financial sector supervision
and current regulatory priorities
Welcoming remarks by H E Sultan Bin Nasser Al-Suwaidi, Governor of the Central Bank of
the United Arab Emirates, at the 9th High-Level Meeting for the Middle East & North Africa
Region on "Strengthening financial sector supervision and current regulatory priorities",
organized by the Basel Committee on Banking Supervision (BCBS), the Financial Stability
Institute (FSI) and the Arab Monetary Fund (AMF), Abu Dhabi, 18 November 2013.
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Good Morning
Excellencies
- The honorable, Josef Tošovský, Chairman of the BIS Financial Stability
Institute,
- H.E. Dr. Jassim Al Mannai, General Manager & Chairman of the Arab Monetary
Fund,
- Distinguished Guests,
- Ladies & gentlemen,
It gives me great pleasure to welcome you to the UAE, especially those who traveled a long
way to be here with us at the outset of this important high level meeting, and I would mention
in particular the honorable Stefan Ingves, Governor, Sveriges Riksbank and the
honorable Eric Rosengren, President & CEO Federal Reserve Bank of Boston, and the
distinguished speakers.
First of all, I take this opportunity to thank the organizers for their careful selection of the
meeting title: "Strengthening Financial sector supervision and Current Regulatory Priorities",
also for the choice of the excellent topics of discussion. I believe this meeting will definitely
help regulators in the MENA region develop appropriate methodologies, regulations and
macro-prudential oversight regimes that would help us all achieve our objectives, in a more
efficient and improved manner.
Regulatory development is currently a key focus for Central Bank of the UAE. Very briefly, I
would like to mention our two recent Regulations, namely:
1) Regulations regarding mortgage loans, and
2) Regulations re monitoring large exposure limits
I would not go into details of these two Regulations, as their details are available on the
Central Bank website (or will be available very soon).
However, what concerns us at Central Bank of the UAE, is that with strengthening
regulations and related supervision, extension of credit through the banking system will be
impacted. And since we are operating in one of the developing economies in the region, we
believe that we have to support economic and social development. For this reason we have
to focus on certain initiatives that could mitigate the impact that would come through
strengthening regulations and related supervision, such as:
1) Financial Inclusion: In this respect, and although the UAE is well developed when it
comes to Financial Inclusion, there are still unbanked sectors of the society and under
banked geographical areas within the UAE.
Therefore, we need to provide the infrastructure necessary for banks and other financial
institutions to provide their services including credit, to all sectors of the society and in all
geographical regions within the UAE. This will be achieved, sometimes, through using
electronic systems.
2) SME Financing: We believe that SME Financing will become more difficult when new
global regulations are implemented, therefore, we have to find ways and means to improve
SME financing outside the banking system. At the moment, the UAE is looking at
experiences of other jurisdictions and recently we have at a GCC Banking Conference which
was held at the beginning of this month, discussed the experience of Korea. We are also
looking at the experiences of Italy and Malaysia.
We believe that SME Financing is very important for job creation. Our region in particular will
need to create more jobs in the future, due to relatively young population.
3) Domestic Debt Market: The development of a domestic debt market is, in my view, of a
national priority. Companies, particularly large private companies and GREs, need an
alternative to bank lending. It is a more reliable source of funding and it is less costly for large
corporations. Banks also would need instruments of the domestic Debt Market to fulfill the
requirements of Basel 3 regarding liquidity ratios. As local debt markets are at an infancy
stage in many countries in the region, this would make it difficult for banks to hold
highquality liquid debt instruments as "preemptive" liquidity buffers against early signs of stress
as required by Basel 3.
Therefore, it is necessary for the UAE now to expedite the issuance of the public debt law
and to set up the needed market infrastructure, as a first step on the way to a vibrant
domestic debt market.
Excellencies
Ladies & gentlemen
With this I come to the end of my speech, but before I close, I would like to thank the Basel
Committee on Banking Supervision (BCBS), the FSI of BIS and the AMF, for holding this
important high level meeting here in Abu Dhabi, UAE.
I wish you all a successful meeting.
Thank you for your attention...