The United Nations Special Envoy for Financing for Development, Mahmoud Mohieldin, said that it is too early to talk about containing the banking crisis, pointing out that markets and banks will be tested during the coming period.
In an interview with Al-Arabiya, Mohieldin added that financial institutions will be more stringent, which will reflect on the lending request.
He explained that deposits are moving faster thanks to technology, while he believes that cash is not new financing, but is linked to emergency procedures.
He stressed the importance of spreading confidence in banks and markets, pointing to the occurrence of revisions to the procedures followed, especially with regard to accountability for the maximum limit of deposits covered by insurance.
On the danger of other banks defaulting, Mohieldin said that US Treasury Secretary Janet Yellen’s statement today came at the right time to reassure the markets, adding: “Everyone knows that there are rules for financial oversight and supervision that must be reviewed so that some unworthy financial institutions do not dare to transgress financial rules.” .
He pointed out that there are greater burdens on the regulatory authorities in the audits, and there will be audits to find out the causes of the crisis.
Arab countries
He added, “The Arab countries take caution and caution in their dealings with global markets, such as the Asian crisis in 1997. The Arab countries were the least directly affected, in addition to the fact that the impact of the 2008 crisis was also low, except for some companies that had direct investments in troubled banks and financial institutions and were limited time.”
Mohieldin revealed that the current crisis witnessed assurances from officials in Arab central banks that they would not be exposed to troubled banks.
Mohieldin said that the fears for the Arab countries are represented in the direct impact on the real economy and not on the financial markets, and this is what necessitates the speed of movement in managing the situation to adapt to the recurring and continuous crises.
And he continued, “With these crises, how can we push economic growth rates, combat poverty, and provide job opportunities with all the unfavorable climates globally?”
