Saudi financial officials on Thursday downplayed the risks to the global banking sector, days after market turmoil led to the collapse of two technology lenders and put Credit Suisse under pressure.
Saudi financial officials on Thursday downplayed the risks to the global banking sector, days after market turmoil led to the collapse of two technology lenders and put Credit Suisse under pressure.
And Saudi Finance Minister Muhammad Al-Jadaan expressed, in an interview with Agence France-Presse, his belief that “big banks” are subject to supervision, and he said, “I do not see” the risks that some see, with regard to internationally known institutions.
Al-Jadaan’s statements come the day after the “Credit Suisse” bank’s share recorded the largest decline in its history, amounting to about -25% at the close, after the “Al-Ahly Bank of Saudi Arabia”, its main shareholder, refused to provide more financial assistance to the faltering Swiss banking giant.
On Thursday, Credit Suisse shares rebounded after it received about $54 billion in aid from the Swiss Central Bank in an effort to restore investor confidence.
Al-Jadaan considered that the reaction on Wednesday may be “exaggerated” because the market is unstable.
In turn, the Chairman of the Board of Directors of the National Bank of Saudi Arabia, Ammar Al-Khudairi, played down the importance of what he described as “panic”.
In a statement to CNBC, Al-Khudairi said, “This panic, or a little bit of it, is completely unjustified, whether it is for Credit Suisse or for the entire market.”
Without naming specific financial institutions, Al-Jadaan said that several failures, including at the regulatory level, fueled unrest in the sector, whether in terms of “supervision” or “management”, and whether in terms of “mismatch” between assets and liabilities.
And he stressed that the two regulatory agencies in Saudi Arabia, since ancient times, are “very conservative”, which we are benefiting from today in the face of a crisis situation.
Al-Jadaan’s statements came on the second and last day of a conference hosted by Riyadh aimed at highlighting reforms in the Saudi financial sector, within the framework of Saudi Crown Prince Mohammed bin Salman’s reform plan “Vision 2030”.
Saudi Arabia, the world’s largest exporter of crude oil, is witnessing a growing stock market and low inflation. Last year, the Kingdom’s GDP rose by 8.7 percent, which is an attractive factor for investors.
And on Sunday, the Saudi Aramco oil group announced that it had achieved “record” profits of $ 161 billion in the year 2022.
Al-Jadaan expressed his belief that what attracts investors in this period and in this region is that it is managed in a way that avoids the disturbances we are witnessing in other parts.
