Saudi financial officials downplayed risks to the global banking sector on Thursday, days after market turmoil led to the collapse of two tech lenders and put Credit Suisse under pressure.
And Saudi Finance Minister Mohammed al-Jadani, in an interview with Agence France-Presse, expressed his belief that “big banks” are being supervised, saying he “doesn’t see” the risks that some do. Internationally renowned institutions.
Al-Jadaan’s announcements came after Credit Suisse shares posted their biggest-ever drop of -25% last week after Saudi Arabia’s Al-Ahly Bank, its biggest shareholder, withdrew. to provide further financial support to the Swiss banking giant.
Shares in Credit Suisse rose on Thursday after it received about $54 billion in help from the Swiss central bank to restore investor confidence.
Al-Jadaan felt that Wednesday’s reaction may be “exaggerated” because the market is volatile.
In turn, the chairman of the board of directors of the National Bank of Saudi Arabia, Amar al-Khudairi, played down what he called “panic”.
In a statement to CNBC, al-Khudair said: “This panic, or part of it, is completely unwarranted, either for Credit Suisse or for the entire market.”
Without naming specific financial institutions, Al-Jadaan said that various failures, including at the regulatory level, have caused confusion in the sector, whether in terms of “oversight” or “management”, as well as a “mismatch” between assets and liabilities. .
He emphasized that Saudi Arabia’s two regulatory agencies have been “very conservative” since ancient times, which we now benefit from in a crisis situation.
Al-Jadaani’s comments came on the second and final day of a conference hosted by Riyadh aimed at highlighting reforms in Saudi Arabia’s financial sector as part of Saudi Crown Prince Mohammed’s Vision 2030 reform plan. bin Salman.
Saudi Arabia, the world’s biggest exporter of crude oil, is experiencing a booming stock market and low inflation. The kingdom’s GDP grew 8.7% last year, an attractive factor for investors.
And on Sunday, Saudi oil group Aramco announced it would achieve a “record” profit of $161 billion in 2022.
Al-Jadaan expressed his belief that what attracts investors in this period and this region is that it is managed in a way that avoids the chaos we see elsewhere.
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