The Minister of Finance Dr. Ibrahim bin Abdulaziz Al-Assaf patronized the financial stability seminar organized by the Saudi Arabian Monetary Agency and the Capital Market Authority today in Riyadh.
In this seminar, speakers from the International Monetary Fund; the International Organization of Securities Commissions; a number of government and semi-government bodies; banks and risk departments managers; finance, investment and insurance companies representatives, and a number of specialists have been participated.
The Minister of Finance delivered a speech in which he said that "this seminar comes at the right time as the Kingdom of Saudi Arabia has launched its vision 2030 a few months ago and began the implementation of the national transformation program. I have no doubt that we all agree on the paramount importance of the role of the financial sector and its stability and the multiplicity of its sources in the realization of the vision. The objective of this seminar as I see, is to raise the level of awareness, exchange of knowledge and perspectives; conducting examination on the issues that are related to the stability of our financial system at the operational and policy-making levels .
His Excellency the Minister of Finance explained that the Kingdom is facing a current domestic and economic, financial global challenges while enjoying a position of strength, whether at the financial or cash levels. He said, "It has been more than two years since the sharp drop in oil prices, the main source of income for finance of the kingdom and the important component of its national economy, despite that and with God's guidance, we have been able to maintain a good position in public finances, as we have been able to maintain the stability of government reserves as they are still high and the level of debt remains low. Our banks are still enjoying strong balance sheets and indicators of solid financial stability. 'Our banks will continue to do so, God willing.'
Dr. Al-Assaf reviewed issues concerning the financial system in the Kingdom. He said that "the financial institutions maintain their flexibility, as our banks enjoy relatively high levels of capital adequacy and liquidity ratios, despite some pressure on liquidity at the system level in general. Nonetheless, this does not mean that we accept this situation, but we continue to periodically review our policies relating to financial stability and modernize the inefficient ones and action will enable us to adapt to the current domestic and global challenges. Indeed, several government agencies have taken several actions, including actions in the context of the tasks entrusted to them and their roles in achieving the 2030 vision and program of national transformation. These actions succeeded in reducing the pressure, which hampers economic growth including actions taken by the Ministry of Finance, like the establishment of Bureau of Public Debt, which proved recently great success in issuing the international version of the Saudi Arabia bonds as well as the establishment of public finance macrocosmic unit, in addition to the procedures relating to the system of government procurement which have been accomplished. Moreover, to start working in most of the other thirty initiatives. Saudi Arabian Monetary Agency, in its turn, has adopted a number of procedures, which our colleagues in the organization will acknowledge you about them and to discuss their impacts in the context of this conference, also the fiscal consolidation recent actions taken by the government is expected to reduce pressure on government finance.
The Minister pointed out that he will address the important aspect of financial depth of the Kingdom which is considered unique through having a good number of specialized government financing institutions such as the Public Investment , the Industrial Development Fund. Fund for Agricultural Development, the Bank of Credit and Savings. Real Estate Fund. the Saudi Fund for Development and the Program of financing exports "that is linked to it". Finally, the Financing Program administered by the Ministry of Finance which the government benefited from the financial savings years ago and stepped up the income of those funds and programs which enabled them to continue to play an important role in the financing system for the private sector, in addition, some of those funds benefited from its available liquidity by investing it in the public debt tools and others.
The Minister of Finance concluded his speech by saying that the economic history of developed countries and development countries showed us that the strong and stable financial system is a cornerstone for achieving economic growth, while the weakness of this system could result in negative consequences for the economy in general. As a result, because today's world is characterized by the presence of integrated financial systems and major financial institutions, cross-border, the financial risks and inefficiencies now become more and their negative effects on the economy become the most influential. For this reason, it is important to ensure the stability of both our economy in general and our financial system particularly through having the appropriate institutional framework in order to maintain the financial, monetary and protective policies and to develop them; to raise the coordination level between different government agencies; knowledge sharing with the private sector and to promote awareness of the risks and financial inefficiencies. This confirms what I have said at the beginning of my speech about 'the importance of this seminar'