Our recent experiences revealed that sovereign  BIS central bankers’ speeches  1  and banking crises are highly and tightly intertwined. In this context, SAMA as the commercial bank and insurance regulator will continue its conservative policy on banking and insurance supervision, and will fully implement the recommendations of the Basel Committee on capital requirements. 3. Sources of finance: domestic  In emerging/developing economies, banks are the most important source of finance. As is the case in most emerging markets, bank intermediation is still a favoured option in Saudi Arabia, with bank credit/GDP at about 50%. The economy, in common with other developing economies, is relatively under banked, but bank penetration is increasing. Similarly, borrowing by individuals is relatively conservative (consumer loans/GDP is about 12%). The eventual passage of a mortgage law, along with increased lending to SMEs, should help to encourage responsible borrowing in these areas and improve banking penetration in the economy. The problem in the advanced economies is that banks are forced to retrench from an overleveraged position; but that is not the situation here. The domestic banks have strong capital adequacy and liquidity ratios. This means they are well-placed to extend credit to the private sector (corporates, households & SMEs) without burdening their balance sheets. Banks are now diversifying their revenue stream by widening their focus to include SMEs and households. In addition to bank lending, Saudi businesses have access to funds through the Tadawul stock market.

Banks worldwide spend over $ a year on financial crime compliance: enriched data is an important ingredient in getting this number to drop. ISO 20022 provides a common language for financial transactions that allows for richer and more structured data. However, making the most of it requires consistent adoption across jurisdictions and using it to transmit a wider set of information than legacy payment messages. Limited or inconsistent uptake could lead to fragmentation. There is no point for me to include a code for the purpose of my payment if my South African counterpart was using a different set of codes. To establish a basic level of consistency, the Joint Task Force of the CPMI and Payments Market Practice Group have consulted on harmonising requirements for enhancing crossborder payments. [15] They received an excellent response and will be announcing the results in the autumn. Another important dimension is the harmonisation of Application Programming Interfaces (APIs). Almost two-thirds of the payment systems surveyed by CPMI[16] already offer APIs to their participants. In the UK, our renewed RTGS has this month enabled its first API, with a full-fledged suite of APIs due to be delivered next year. APIs make it easier for payment systems and their participants to exchange data. The number of potential applications is vast. But to deliver real benefits these potential use cases rely on harmonised API standards. The CPMI is convening an industry panel of API Experts (APEX) from private and public sectors, to develop recommendations on the strategic direction for the industry.