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UAB seeks steps to avert asset bubbles
February 7, 2010
Arab central banks need to take measures to control lending activity in their countries to counter the risk of asset price bubbles that could be triggered by fresh influx of foreign capital, the region's top banker said yesterday.
Adnan Ahmed Yousif, Chairman of the Beirut-based Union of Arab Banks (UAB), also said banks in the oil-rich Gulf and other regional nations should consider mergers to create stronger financial units following the global fiscal turmoil.
Writing in the UAB's monthly bulletin, Yousif cited recent forecasts by the International Monetary Fund (IMF) that foreign investment flow into emerging markets would pick up in the coming period because of higher interest rates.
"We have already started seeing the return of private capital to the emerging markets seeking higher profits, which would increase the risk of bubbles in assets prices as predicted by the World Bank," he said.
"From now on, we should seek methods to organise credit, where central banks in the Arab World should discuss and monitor the increase in assets prices. There is a need for more organisational measures to take the asset prices bubbles into consideration if we want to prevent such a crisis."
Original Posting At: Business24-7
Adnan Ahmed Yousif, Chairman of the Beirut-based Union of Arab Banks (UAB), also said banks in the oil-rich Gulf and other regional nations should consider mergers to create stronger financial units following the global fiscal turmoil.
Writing in the UAB's monthly bulletin, Yousif cited recent forecasts by the International Monetary Fund (IMF) that foreign investment flow into emerging markets would pick up in the coming period because of higher interest rates.
"We have already started seeing the return of private capital to the emerging markets seeking higher profits, which would increase the risk of bubbles in assets prices as predicted by the World Bank," he said.
"From now on, we should seek methods to organise credit, where central banks in the Arab World should discuss and monitor the increase in assets prices. There is a need for more organisational measures to take the asset prices bubbles into consideration if we want to prevent such a crisis."
Original Posting At: Business24-7
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