Central Bank Governor confident of corporate governance laws

ABU DHABI — The Governor of UAE's Central Bank Sultan Nasser Al Suwaidi yesterday showed confidence in the laws governing issues of corporate governance in the banking sector which does not need any more rules.

By A Staff Reporter

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Published: Mon 6 Mar 2006, 10:00 AM

Last updated: Sat 4 Apr 2015, 3:29 PM

"The year 2000 regulations which separated the responsibilities of the Chairman and CEO of a banking company was a timely measure towards transparency which has benefited the industry," Sultan Nasser Al Suwaidi told reporters at the sidelines of a conference which was organised by IFC and Central Bank of the UAE to develop a National Reform Agenda for Bank Corporate Governance in the MENA region.

Al Suwaidi said separation of two posts of Chairman and CEO in a banking company and creation of audit and credit committees, besides the appointment of non-executive board members have paid out not only for the bank but also for the economy.

He said that there is no need for more regulations, as country was already on the right track in this area. In his opening remarks, Governor Suwaidi called it a a unique opportunity to address some of the key bank governance issues in the UAE and wider region, and develop a tailored approach to move forward. He said that conference was organised in the context of recent trends and development in the field of corporate governance.

Senior Manager IFC Azmat Taufique said that banks are a critical component of any economy, as they are the sole means of financing for a great majority of enterprises in the region." In addition, he said that some banks are expected to make credit and liquidity available in difficult market conditions.

And yet banks carry inherent risks in that they take large amounts of risk-bearing obligations on their books, which can cause urgent and rapid crisis, Taufique said.

Highlighting the topic, IFC official said that the collapse of a bank may destroy value for its public depositors and its shareholders and even a single collapse may send shock-waves across the entire financial sector and possibly require a costly bail-out. Some 200 bankers from MENA attended the conference.

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