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Speech of His
Excellency the Governor
To
Symposium on
Challenges Posed to Investment and Saudi Banks
In an Environment
of Global Economic Openness
Held on 11/11/1427H.
corresponding to 2nd December 2006G.
At Intercontinental
Hotel – Riyadh
Dear Audience,
At the
beginning, I would like to welcome all honorable attendance. It gives me
a great pleasure today to address you at the outset of the deliberations
of this symposium on "Challenges Posed to Investment and Saudi Banks
in an Environment of Global Economic Openness"
which is convened at a time the Kingdom is witnessing a period of
economic growth accompanied with and enhanced by steps of economic
reforms in the fields of streamlining of regulations, restructuring of
the national economy, and approval of a number of mega development
projects as well as the accession to the World Trade Organization which
is an important step towards enhancing integration into the world
economy, coping with economic developments, and attraction of foreign
investments apart from accession to global markets which will be
reflected on the competitive capacity of the national economy.
Dear Audience,
The current Symposium is being held in a promising economic
environment in this country. The Kingdom has recorded outstanding
economic results. The real gross domestic product rose by 6.5 percent in
2005. This growth rate was reflected on almost all sectors of the
economy which is characterized by strong investment. International
rating agencies recorded their appreciation and certified the efficiency
and strength of the national economy. Eventually, they raised the credit
rating of the Kingdom to advanced grades. This environment promoted the
interest of foreign investors to participate in and benefit from the
various investment opportunities available in the Saudi economy. The
Saudi banking system has played a vital role in the enhancement of the
national economy. Thanks to its use of the latest technologies and
various banking products, the banking system has witnessed good
development under a supervisory system which is very keen to meet
domestic requirements and legislation and to comply with international
standards, including Basel Capital Adequacy Standard. The banks
operating in the Kingdom are very serious in the application of this
standard. As a result, the Kingdom's banking system has become one of
the advanced systems, not only at the regional level but also at the
international one.
Dear
Audience,
Basel II Standards are the most important supervisory
initiatives of this decade, and they will have a considerable impact on
changing the conduct of risk management at all banks regardless of their
size and location. The Standards aim at achieving a number of
objectives, including ensuring the capital adequacy of the banking
sector to encounter any latent risks and the assessment of banks' risk
management systems so that the supervisory authorities could ensure that
they are appropriate, in line with the risks that banks might encounter,
and up to the best banking practices in the area of effective banking
supervision. Basel II principles require all banks to address all risks,
such as credit risks, market risks, operational risks and others. The
principles envisage that banks should have in place systems that would
help identify, measure, monitor and make provisions for such risks. The
domestic banks are aware of the importance that the application of the
new standard should coincide with concentration on risk management in
keeping with the best global practices by using the best technological
solutions.
Reviewing the topics of this Symposium and the quality of its
speakers, I see that it broadly covers aspects and all types of
applications of banking risk management as Basel II principles seek to
highlight and address.
In conclusion, I express my deep thanks to the audience and
the organizers of this symposium, and we look forward to having positive
contributions and outstanding papers, wishing you all success.
Al Salumu Alaikum Warahmatu Allahi Wabarakatuh.
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