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A high profile conference on “New Approach for Risk Management” was held on 29th October 2009 at the Hotel Le Bristol in Beirut, Lebanon. The meeting was attended by Governors of Central Banks from Turkey, Syria and Lebanon, Mr Hamad Al Mannai, Director-Qatar Central Bank, Mr Seetharaman, CEO of Doha Bank and Senior Management personnel from Middle East Banks and Financial Houses.
The meeting covered a variety of issues that has gripped the financial world and the lessons learnt from the current financial turmoil, the weaknesses of credit rating agencies and a radical new approach to Anti Money Laundering.
Mr Seetharaman, CEO of Doha Bank, spoke on the causes of the crisis and its impact on the economies, the progress made on implementation of solutions and the key measures taken by Financial Institutions.
He said “This crisis was caused by lapses at three different levels – one, the Financial Regulators were not equipped to see the risk concentrations and flawed incentives behind the financial boom. Two, policy makers failed to guage the macroeconomic imbalances that brought about the systemic risks in the financial system and in housing markets. And three, International financial institutions had failed to achieve ‘forceful cooperation.’
Mr Seetharaman, who was conferred the title of ‘Best CEO in the Middle East Banking Industry’ in 2008, touched upon the impact of the crisis on world economies. He continued, “This crisis has compelled the western economies ‘to cut their coat according to the cloth’. In future there would be increased emphasis on saving than on spending, reduced trade freedom and big and unexpected swings in the commodities and financial world.”
“But one should not press the panic button” Mr Seetharaman advised. “We need to tackle the difficult times ahead with confidence. We need to develop early warning indicators, have a tight cash management system and optimize working capital and make the best use of our limited resources.”
Mr Hamad Al Mannai, Director of Financial Consumers Protection in Qatar Central Bank spoke at length on the credit risk, the weaknesses of the Rating Agencies and the bank’s Internal Models. He said it is now common knowledge, particularly after the current financial crisis, that International Rating Agencies have lost their credibility after they have come under fire for assigning top ratings ‘AAA’ to risky mortgage securities which later defaulted.
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