Enhancing financial stability, resilience of Arab banking sectors is crucial
Abdallah made his remarks during the 19th annual high-level meeting on financial stability, regulatory, and supervisory priorities, which the Arab Monetary Fund (AMF) hosted in Abu Dhabi, the United Arab Emirates, from 18 to 19 December.
During the meeting, Abdallah underscored central banks' pivotal role in ensuring that financial institutions adopt dynamic and precise risk management policies.
He noted that these policies enable banks to adapt to changing circumstances, cope with successive shocks, and address emerging risks, especially those related to climate change and cybersecurity.
This can be achieved through the implementation of macroprudential policy tools.
The governor also highlighted the need for coordinated fiscal and monetary policies to promote economic stability, mitigate inflationary pressures, and increase financing for the private sector, which would drive economic growth.
Additionally, he explained that the CBE regularly assesses the banking sector's resilience to various risks that could threaten financial stability, adopting a macroprudential approach.
Stress tests are also conducted comprehensively incorporating economic, financial, geopolitical, and climate-related risks to evaluate the banking sector's exposure to systemic risks from these shocks, he added.
These tests have demonstrated the resilience of the Egyptian banking sector and the effectiveness of the CBE’s macroprudential policies in strengthening financial stability.
Moreover, the meeting included several sessions addressing priority issues facing central banks and banking systems in the Arab region.
Discussion topics also included emerging risk trends in Arab financial systems, regulatory priorities amid economic shifts and geopolitical developments, and central banks' evolving role in response to the growing reliance on artificial intelligence and technological advancements.
Other topics focused on enhancing governance frameworks for central banks and revising the core principles of effective banking supervision, focusing on their implications for supervisory and precautionary frameworks.
This annual meeting is a key platform for policymakers, decision-makers from central banks, financial institutions, and senior banking supervision officials in the Arab region.
It serves as an opportunity for distinguished experts and high-level officials to exchange views on the latest developments in financial stability and regulatory legislation.
The insights generated through these discussions are instrumental in shaping effective decisions to strengthen financial stability across Arab countries.
AMF, a regional Arab organization founded in 1976, commenced its operations in 1977.
It has 22 member countries: Jordan, United Arab Emirates, Bahrain, Tunisia, Algeria, Djibouti, Saudi Arabia, Sudan, Syria, Somalia, Iraq, Oman, Palestine, Qatar, Comoros, Kuwait, Lebanon, Libya, Egypt, Morocco, Mauritania, and Yemen.
AMF aims to correct payment imbalances, promote Arab monetary cooperation, remove restrictions on current payments, and support the development of Arab financial markets, with the ultimate goal of creating a unified Arab currency.
To achieve this, it provides credit facilities, encourages trade and capital movements, offers technical assistance, and collaborates with member states and other Arab or international organizations.