governor of the central bank of kuwait, basel a. al - haroon, in the 46th ordinary session of the council of the governors of the arab central banks and monetary authorities, held in jeddah, kingdom of saudi arabia on september 18, 2022. page 1 of 4 in line with its proactive approach adopted since march 2020, the central bank of kuwait has taken several measures and actions through its various monetary, supervisory and hedging instruments. at the level of monetary measures, the central bank of kuwait cut the interest rate several times in march 2020 down to all - time low 1. 5 % to reduce the borrowing cost and ensure that the temporary liquidity issues at the cbk - regulated units would not turn to permanent issues to their solvency. this step was followed by a series of measures related to financial stability including activation of its emergency plans and those of the banking sector to address the requirements of the pandemic, as well as taking a package of measures within the macroprudential policy to ease the regulatory requirements upon the outbreak of the crisis, the most important of which was releasing the prudential capital buffers of 2. 5 %, facilitating liquidity requirements to provide a wider lending space for banks, and reducing the risk weights related to exposures to small and medium enterprises, thus supporting the vulnerable sectors. as regards, the financial stability, the measures included payment moratoriums for the affected customers, obligating banks not sell or seize the collateral, and instructing banking sector units to conduct a comprehensive review of their credit and investment portfolios. to mitigate the economic and financial damages, and maximize the benefits from the aforementioned monetary and financial measures, the central bank developed and implemented a clear plan to follow up on the situations during the pandemic, in light of the data on the conditions and spreading infection. the central bank of kuwait formulated a set of goals to curb the crisis repercussions and ensure business continuity, support the crucial sectors, and prevent the short - term liquidity crisis from turning into a solvency crisis. having launched a package of anti - crisis measures, the central bank of kuwait maintained its vigilant monitoring of the local and global economic developments, oversight over the banking sector and monitoring its financial soundness indicators. the sector's results revealed that some banks took advantage of the mitigants to practice their business comfortably without any pressures as a result of the crisis. development of a plan to exit the stimulus environment

and achieve financial stability at large. central bank of kuwait - public عام - بنك الكويت المركزي the role of effective supervision is also critical because not every risk can be pre - defined in a rulebook. while overseeing the dynamic world of finance, supervisors must be agile enough to suitably correct course in line with the constantly changing nature of the banking industry or the emergence of new risks. in the second part of my speech, i would like to touch upon two such emerging concerns ; cyber threats and climate change. addressing emerging concerns ensuring resilience against cyber threats first, consider the issue of cyber threats. growing footprint of technology is influencing every facet of the banking business, transforming banks ’ internal processes as well as their engagements with customers. as the role of technology deepens from a mere support function to a platform central to everything that banks do, the likelihood of new risks emanating from ubiquitous and connected technologies loom large. materialization of such risks will not only disrupt vital financial services but will also undermine the security and confidence in the financial system. in fact, the scale and sophistication of cyber - attacks is already on the rise. examples include data breach at target of 70 million credit card users, a cyber - attack on equifax compromising data of 143 million customers, and the hacking of over 100 million customers ’ data at capital one bank. no wonder, cyber risk features as a key concern in different industry surveys. for instance, respondents to the bank of england ’ s systemic risk survey of 2h - 2018 quoted the risk of a ‘ cyber attack ’ as the second major threat to the system, only behind the brexit induced political risk. the growing threats of cyber risk need to be reflected in banks ’ operational risk capital charge. incidentally, the basel committee has revised its operational risk methodology by replacing the existing three techniques with a simplified standardized measurement approach and expects that its implementation, due by january 2022, will increase capital risk charge for operational risk by 18 % for a group of banks currently using standardized approach of the old regime. while it is not clear how much of the increase in operational risk charge is driven by the recognition of growing cyber threats, greater capital allocation for operational risk is a step in the right direction, given the increasing significance of such low probability but high impact risks. however, reliance on capital alone will not suffice. supervisors must ensure that banks