FSB MENA group discusses regional financial stability
Monday, 11 18 2019, Category: Economy, Country: Middle East
The Financial Stability Board (FSB) Regional Consultative Group (RCG) for the Middle East and North Africa (MENA) met today in Riyadh at a meeting hosted by the Saudi Arabian Monetary Authority.
Members received a briefing update from the Saudi Arabian authorities on the financial regulatory priorities for their G20 Presidency starting next month. The group also received an update on the FSB’s ongoing work and its plans for 2020, which were discussed at the FSB Plenary meeting earlier this month. RCG members discussed the FSB’s programme of evaluations of the effects of post-crisis reforms, including the evaluation of small and medium- sized enterprises (SME) finance to be published this month. They emphasised the importance of SMEs to economic activity in the region. Members also discussed international work on the transition from LIBOR and other IBORs, and underlined the importance of financial and non-financial firms being prepared for the risk that LIBOR will end once official sector support for the benchmark is withdrawn at end-2021.
Members discussed global and regional financial vulnerabilities, including a weaker global growth outlook, the implications for the region of the “lower for longer” interest rate environment and rising debt burdens, in particular of governments and corporations. At the same time, they noted the protection provided by the resilience of financial institutions and markets in the region. Some members thought challenges for IBOR transition might actually lay the ground for opportunities to deepen the local capital markets.
The group discussed the implications of stablecoins on financial stability and monetary stability. They considered the potential challenges such instruments also pose in areas such as, consumer and investor protection; cross-border capital flows including remittances; market integrity; cyber security; and anti-money laundering/countering the financing of terrorism regulation. However, they emphasised more generally the need for improvements in the speed and access to cross-border payment systems.