the problem of too - big - to - fail institutions. while some of these reforms remain unfinished, and some additional measures are needed, there has been considerable progress. unfortunately, the same cannot be said with respect to shadow banking and, more generally, the vulnerabilities associated with wholesale short - term funding. these vulnerabilities involve both large, prudentially regulated institutions, and thus too - big - to - fail concerns, and the broader financial system. except for the liquidity requirements agreed to in the basel committee, however, the liability side of the balance sheets of financial firms has barely been addressed in the reform agenda. yet here is where the systemic problems of interconnectedness and contagion are most apparent. and, as evidenced by the funding stresses experienced by a number of european banks prior to the stabilizing measures taken by the european central bank, these problems are still very much with us. within the united states, reform efforts are underway in some discrete, but important, areas. the provisions of dodd - frank requiring more central clearing of derivatives and minimum margins for those that remain uncleared are designed to provide more systemic stability. as to shadow banking itself, the fsoc recently proposed options to address the structural vulnerabilities in money market mutual funds, with an eye toward recommending action by the securities and exchange commission. and the federal reserve has begun using its supervisory authority to press for a reduction in intraday credit risk in the triparty repo market. but these measures are incomplete, and do not extend to all forms of short - term funding that can pose run risks, a universe that is likely to expand as prudential constraints begin to apply to large existing shadow banking channels. monetary policy. while the first two policy challenges are shared among regulatory and financial agencies, the third lies solely with central banks. in the wake of the crisis, we need to consider carefully the view that central banks should assess the effect of monetary policy on financial stability and, in some instances, adjust their policy decisions to take account of these effects. the dramatic rise in housing prices, and the associated high amounts of leverage taken on by both households and investors, occurred during an extended period of low inflation. some have suggested that, by not raising rates because inflation remained subdued, monetary policy in the united states and elsewhere may have contributed to the magnitude of the housing bubble. whatever the merits of that much - contested point, it seems wise to address this issue as

fahad almubarak : brief review of financial developments in saudi arabia speech by his excellency dr fahad almubarak, governor of the saudi arabian monetary agency ( sama ), marking the seventh anniversary of blessed allegiance pledge to the custodian of the two holy mosques king abdullah bin abdulaziz, riyadh, 17 may 2012. * * * saudis celebrate on the 26th of jumada ii 1433h ( may 17, 2012 ) the seventh anniversary of the blessed allegiance pledge to the custodian of the two holy mosques king abdullah bin abdulaziz. the celebration is a true image of loyalty to the custodian of the two holy mosques, who is faithful to his nation ’ s interests. it is based on well - established bases, in the forefront of which are the tributes of our wise leadership such as the great keenness on the welfare of citizens and the enhancement of the development process. it is difficult to enumerate the achievements of the custodian of the two holy mosques in a few words, but, however, i will touch upon some of them. the custodian of the two holy mosques has taken a broad range of decisions and measures aiming at restructuring and regulating the economy, updating regulations and legislation to enhance the efficiency and competitiveness of the economy and support the optimal operation of production factors, apart from providing an advanced regulatory and administrative framework and an attractive environment for domestic and foreign investments to achieve diversity in the economic and productive environment in order to continue creating job opportunities for the sons and daughters of the kingdom. fortunately, oil prices have constantly improved, helping to accomplish many of the development objectives. as a result, the private sector during the period from 2005 up to the end of 2011 achieved a real annual growth rate averaging 5. 5 percent. the balance of payments ( bop ) recorded a surplus of rls 2. 5 trillion. the actual expenditure of the public finance stood at rls 3. 8 trillion, of which rls 1. 0 trillion were for capital expenditures. moreover, the ratio of public debt to gdp declined from 39. 2 percent in 2005 to 6. 3 percent in 2011. the banking sector recorded strong and constant growth during that period, surpassing significantly the repercussions of the global financial crisis, and total assets of banks rose by more than two fold. many development projects have been approved for enhancing and modernizing the infrastructure, including roads, airports, telecommunications, water & electricity