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Satyendra Pathak
Doha
Qatar’s banking sector is sound, liquid and profitable as the country handled the blockade successfully by taking various policy measures, Qatar Central Bank (QCB) Governor Sheikh Abdulla bin Saoud Al Thani has said in an interview with The Business Year Qatar 2020.
The government and QCB took a series of quick and proactive measures to overcome aftereffects of the blockade so that it had no lasting impact and the economy rebalanced quickly in the second half of 2017, he said.
QCB’s active liquidity management has brought liquidity in the banking system back to complete normalcy, making the sector sound and profitable, Sheikh Abdulla said.
“Qatar’s banking sector has remained sound and liquid, part of which was because of the introduction of Basel III guidelines back in 2013-2014, which ensured a strong capital base for the banks. The pool of high-quality liquid instruments with the introduction of treasury bills and bonds in 2011 also enabled the banks to withstand the sudden liquidity pull back from the blocked countries,” Sheikh Abdulla said.
QCB set up an internal emergency committee to monitor the developments in various segments of the financial sector. In response to a withdrawal of funds by the blockade countries, he said, liquidity management measures were taken by QCB and supported by the government and public-sector entities.
“A speculative attack on the currency was also warded off through the announcement of our firm commitment to the peg. Legal investigations were also initiated against banks involved in speculative attacks. With the return of confidence, the stock market has also fully recovered,” he said.
The QCB governor said that the government took various measures to improve the investment environment, encourage local manufacturing industries, initiate self-sufficiency in dairy and farm products, expand into new air and sea routes, offer visa-free entry and enact fiscal reforms through expenditure rationalisation among others.
These initiatives revived the economy and ensured more private-sector participation in the overall development of the economy, he said.
“Renewed international investor confidence also reinforced the stability of financial markets. QCB also proactively utilised communication channels to establish stability in the price of Qatari riyal within a short span of time. Thus, it is not one policy measure, but a combination of policies by the authorities that helped the economy prudently manage its assets,” he said.
“Arrangements were made to establish alternative supply chains for the smooth supply of goods. We rerouted trade channels and initiated fresh trade relationships with other countries to avoid disturbance to external trade. The government also provided the necessary support to the SME sector to set up domestic production facilities. New ports were commissioned and warehouse facilities were improved,” he said.
Talking about the fintech’s potential impact on Qatar’s banking system and how does QCB plan to regulate it, he said, “Fintech activities have grown exponentially in the global financial sector arena in recent years and QCB is actively working on developing strategies to adapt to this changing horizon.”
“Fintech can bring positive change to the sector, but also additional risks. It helps financial sector stakeholders streamline their processes to achieve more efficiency and faster delivery, in addition to facilitating communication with their customers to better understand their needs and enhance their access to financial services,” he said.
“Fintech is also known to increase the contribution of the financial sector to GDP, diversify the economy, and create new market dynamics, which is why we are formulating an approach to fintech that takes lessons from other major global initiatives,” the QCB governor said.
Doha
Qatar’s banking sector is sound, liquid and profitable as the country handled the blockade successfully by taking various policy measures, Qatar Central Bank (QCB) Governor Sheikh Abdulla bin Saoud Al Thani has said in an interview with The Business Year Qatar 2020.
The government and QCB took a series of quick and proactive measures to overcome aftereffects of the blockade so that it had no lasting impact and the economy rebalanced quickly in the second half of 2017, he said.
QCB’s active liquidity management has brought liquidity in the banking system back to complete normalcy, making the sector sound and profitable, Sheikh Abdulla said.
“Qatar’s banking sector has remained sound and liquid, part of which was because of the introduction of Basel III guidelines back in 2013-2014, which ensured a strong capital base for the banks. The pool of high-quality liquid instruments with the introduction of treasury bills and bonds in 2011 also enabled the banks to withstand the sudden liquidity pull back from the blocked countries,” Sheikh Abdulla said.
QCB set up an internal emergency committee to monitor the developments in various segments of the financial sector. In response to a withdrawal of funds by the blockade countries, he said, liquidity management measures were taken by QCB and supported by the government and public-sector entities.
“A speculative attack on the currency was also warded off through the announcement of our firm commitment to the peg. Legal investigations were also initiated against banks involved in speculative attacks. With the return of confidence, the stock market has also fully recovered,” he said.
The QCB governor said that the government took various measures to improve the investment environment, encourage local manufacturing industries, initiate self-sufficiency in dairy and farm products, expand into new air and sea routes, offer visa-free entry and enact fiscal reforms through expenditure rationalisation among others.
These initiatives revived the economy and ensured more private-sector participation in the overall development of the economy, he said.
“Renewed international investor confidence also reinforced the stability of financial markets. QCB also proactively utilised communication channels to establish stability in the price of Qatari riyal within a short span of time. Thus, it is not one policy measure, but a combination of policies by the authorities that helped the economy prudently manage its assets,” he said.
“Arrangements were made to establish alternative supply chains for the smooth supply of goods. We rerouted trade channels and initiated fresh trade relationships with other countries to avoid disturbance to external trade. The government also provided the necessary support to the SME sector to set up domestic production facilities. New ports were commissioned and warehouse facilities were improved,” he said.
Talking about the fintech’s potential impact on Qatar’s banking system and how does QCB plan to regulate it, he said, “Fintech activities have grown exponentially in the global financial sector arena in recent years and QCB is actively working on developing strategies to adapt to this changing horizon.”
“Fintech can bring positive change to the sector, but also additional risks. It helps financial sector stakeholders streamline their processes to achieve more efficiency and faster delivery, in addition to facilitating communication with their customers to better understand their needs and enhance their access to financial services,” he said.
“Fintech is also known to increase the contribution of the financial sector to GDP, diversify the economy, and create new market dynamics, which is why we are formulating an approach to fintech that takes lessons from other major global initiatives,” the QCB governor said.
