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“To maintain momentum in the reduction of systemic risks, and to prepare for exits from extraordinary policy support, further action is required of policymakers in several key areas such as careful management of sovereign risks, ensuring that the de-leveraging process is smooth and resulting in a safer, competitive and vital financial system. Policies may be needed to ensure adequate flows of credit to the private sector. Risk of over-regulation should also be assessed carefully,” he said.
The International Arab Banking Summit 2010 “From Crisis to Financial Stability” was held at Swissotel the Boshporus, Istanbul -Turkey from June 17 – 18, 2010. Top international and Arab bankers, economists and business professionals participated in this event.
In the panel discussion on ‘Turkish-Arab co-operation for high competitive financial ventures: Towards a global and sustainable solid economy’, Mr. Seetharaman discussed the prevailing global economic crisis and the challenges faced by countries in moving from crisis to stability. Foremost among the challenges he said were stagnant credit growth, emerging market risks and policy actions.
Mr Seetharaman focused on sovereign risks which can challenge the global financial stability. He highlighted that “The higher budget deficits resulting from the crisis have pushed up sovereign indebtedness and can have the potential for spillovers across financial systems and impact financial stability. The sovereign risks are mainly at Euro zone. At the beginning of the crisis domestic financial systems conditions transmitted the most sovereign risk to other countries in contrast to the latest sovereign risk phase when Greece, Portugal and, to a lesser extent, Spain and Italy became the main contributors to sovereign risk, reflecting the shift in market concerns from financial sector vulnerabilities to fiscal vulnerabilities.”
Mr. Seetharaman gave his economic outlook on Turkish economy and the challenges they face from global financial crisis. He noted that the bilateral trade between Turkey and GCC, especially Qatar has been increasing in recent years. However in 2009 the trade decreased due to the global financial crisis. He expects that bilateral trade with Qatar and GCC will pickup in the years ahead.
Mr. Seetharaman also explained how bilateral transactions between Turkey and Qatar had evolved in recent years, particularly in the oil and gas sectors. “Turkey is under negotiations to develop one of the world's largest gas pipeline projects to carry Qatari gas to the Mediterranean Sea. Qatar's participation in this project as supplier of gas will bring the two countries together on yet another common platform .Turkey may also import around 4 billion cubic meters of LNG annually from Qatar. This approach of Turkey with Qatar is part of a broader Turkish effort to diversify its energy suppliers and supply routes.”
Mr. Seetharaman noted that Turkey is also eager to attract investments from Qatar to boost its own economic development, as part of its broader attempt to turn the country into a major destination for Arabian Gulf capital. “Turkey and Qatar have tremendous opportunities to foster their relations not only in energy but also in fields as food products, water, infrastructure, appliances, and electrical products. There is also huge potential for Turkey and Qatar to develop relations in the field of health services and education,” he said.
In his concluding remarks, Mr. Seetharaman said “GCC and Turkey have many areas to synergise further which would result in a sustainable economy and further governance will be the key to ensuring global financial stability.”
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