At the Opening of the Banking Conference in Muscat, Abu-Ghazaleh : The Priority is to Reform, Liberalize, and Update our Financial Systems.

Mr. Talal Abu-Ghazaleh emphasized that our most urgent priorities lie in the reformation, liberalization, and updating of our financial systems, regardless of the openness to the outside competition, and to pay special attention to the need for a legislative action which lays down the foundation to provide new kinds of services and financial intermediations.

He said that the healthy and stable financial system, supported by sound economy management and prudent regulations is an essential requirement for the economic growth.

This was indicated in the opening speech delivered by Mr. Talal Abu-Ghazaleh on Friday , in his capacity as Vice Chairman and Member of UN Information and Communication Technologies Task Force ( UN ICT TF) , in the Banking Conference of the GCC for the Year 2002 held during the period 25-27 October 2002 , under the auspices of His Majesty Sultan Qabous Bin Sa?eed. The Conference was attended by the governors of the Central Banks in the Arab countries and a committee comprising the chairmen of the investment banks, Arab banks and a selected group of experts in economy and finance?etc.

Mr. Abu-Ghazaleh addressed the participants who are leaders and experts in banks and finance in the GCC countries , in addition to the experts of the Arab and international finance bodies, indicating the importance of the subjects facing the Arab world, which are represented in the methods of assuring the soundness of our financial structure and management system as we face a future of liberalization and regional and international integration.

He also said that the subjects we address such as a common currency, trade liberalization, anti-suspicious financial transactions, the ? Basle Agreement? and corporate governance are all related to globalization and its challenges. .

He added that the Arab world is standing now at many crossroads, and we have many choices to make, but the central thing to our economic prosperity is the need for a secure and dynamic banking sector that can support the economy as a whole .

Mr. Abu-Ghazaleh stressed that what we need is a sound regulation and management of our financial sector, particularly banking, on which all other sectors depend.

He indicated that the Basle Committee of the Bank for International Settlements is working on issuing a ? New Basle Capital Accord? . The proposal is based on three mutually reinforcing pillars that allow banks and supervisors to evaluate properly the various risks that banks face. The ? New Basle Capital Accord focuses on minimum capital requirements, which seek to refine the measurement framework set out in the 1988 Accord, supervisory review of institutions? capital adequacy and internal assessment process, and market discipline, through effective disclosure to encourage safe and sound banking practices?.

He also expressed his belief that a careful consideration of the new Basle Capital Accord will help to facilitate further structural changes in our economies, which will be in the interest of us all.

Abu-Ghazaleh called for the organization of our conditions prior to opening our finance sector to outside competition and prior to seeking greater regional integration, making clear that the WTO related liberalization will ultimately be essential to our economies as a whole . It is also essential to the long?term health of our finance sectors including banks. He said that we cannot rush into it without adequate preparation, as there are currently structural and management problems, as well as issues that need to be taken up by Arab legislators to reform and liberalize the internal operations of Arab Banks.

He said , ? in addition to that, and in my capacity as Chairman of the United Nations Information and Communication Technologies Task Force (UN ICT TF) and Chair of the Commission on E-Business, IT and Telecoms, I emphasize that throughout our deliberations, here and beyond, we should take into consideration the impact of information and communication technologies on banking. The Arab financial sector was once the strongest and the leader of the world , and during the glory days of Arab hegemony, Arabs invented numbers, algebra, credit systems, and ran the world?s trade and finance system. At the same time, there was open and free trade between the entire Arab world from Spain to Africa to Asia.?

He concluded his speech by saying that our wise ancestors taught us that ? the best way to predict the future is to shape it?. I am more than confident that the leaderships of the GCC countries , political and economic, and through the Arab world, are determined to shape, with us and for us, the future predicated on our cultural and moral heritage, on our historic contribution to human progress, for several centuries, and our commitment to resume the role we are worthy to undertake in leading all of us to a better world.