“Mitigating Global Banking Risks: Measures taken by Saudi Arabia’s Financial Officials”

Saudi financial officials downplayed the risks to the global banking sector on Thursday, with consecutive days of market turmoil causing two tech lenders to collapse.

In an interview with Agence France Presse, Saudi Finance Minister Mohammed al-Jadaan expressed his belief that “big banks” are subject to supervision.

He added: “I don’t see the risks that some see, least of all with respect to world-famous institutions.”

Al-Jadaan’s remarks came a day after Credit Suisse recorded the biggest drop in its history of about -25% at the time of closing, after Al-Ahly Bank of Saudi Arabia, its major shareholder, withdrew to provide additional bailouts to the wavering Swiss banking giant, while Credit Suisse stock rebounded today from what happened. About $54 billion in help from the Swiss Central Bank in an attempt to restore investor confidence.

Al-Jadaan believes, without naming specific financial institutions, that several failures, including at the regulatory level, have caused unrest in the sector, whether in terms of “oversight” or “management” and also in terms of “mismatch” between assets. and obligations.

Al-Jadaan thought the reaction might be “exaggerated” due to market volatility, stressing that two regulators in Saudi Arabia have been “very conservative” since ancient times, which is what we use today in times of crisis.

He believed that what attracted investors in this period and in this region was that the management was carried out in such a way as to avoid what we see in other parts of the turmoil.

Al-Jadaan’s remarks came on the second and final day of a Riyadh-hosted conference on reforms in Saudi Arabia’s financial sector as part of Saudi Crown Prince Mohammed bin Salman’s Vision 2030 reform plan.

For his part, Ammar Al-Khudairi, Chairman of the Board of Directors of the National Bank of Saudi Arabia, downplayed what he called the “panic”.

“This panic, or a small part of it, is completely unjustified, whether for Credit Suisse or for the entire market,” Al-Khudairi told CNBC.

Saudi Arabia, the world’s largest exporter of crude oil, is seeing a rising stock market and low inflation. Last year, the Kingdom’s gross domestic product increased by 8.7%, which is an attractive factor for investors.

Oil group Saudi Aramco announced last Sunday that it achieved a “record” profit of $161 billion in 2022.

Source: AFP