H.E. Mr. Hassan Abdalla, Governor of the Central Bank of Egypt (CBE), participated in the “19th High-level Meeting on Financial Stability and Regulatory and Supervisory Priorities” in Abu Dhabi, taking place over the course of December 18th and 19th, 2024. The meeting events were attended by Mr. Khaled Mohamed Balama, Governor of the Central Bank of the UAE, Dr. Fahad bin Mohammed Al-Turki, the Director General and Chairman of the AMF, and Mr. Fernando Restoy, Chair of the Financial Stability Institute (FSI) at the Bank for International Settlements (BIS), along with a number of central banks’ Governors from Arab countries.
The annual meeting encompassed several sessions discussing a number of topics and priority issues for central banks and Arab banking systems. These topics included risk developments in the financial systems of Arab countries, supervisory priorities amid economic changes and geopolitical repercussions, in addition to the role of central banks in light of the growing reliance on artificial intelligence and technological advancements, the enhancement of central banks’ governance, as well as the revised core principles for effective banking supervision and their implications on supervisory and prudential frameworks.
During his participation in the first session of the meeting, the CBE’s Governor Mr. Hassan Abdalla clarified that strengthening the financial stability and resilience of Arab banking sector is currently gaining great importance. He also highlighted the key role of central banks in that context by ensuring banks’ adoption of dynamic and meticulous risk management policies, and their readiness to adapt effectively to the changing conditions, successive shocks and emerging risks related to climate change and cybersecurity challenges. This is achieved through the application of macroprudential policy tools, emphasizing the necessity of coordinating fiscal and monetary policies to boost economic stability, contain inflationary pressures, and direct more financing to the private sector to propel economic growth.
The Governor also clarified that the CBE regularly assesses the banking sector’s resilience in the face of the various risks that may jeopardize financial stability. This assessment is carried out through a macroprudential perspective by applying macro stress tests in context of an integrated scenario incorporating economic, financial, geopolitical and climate-related risks to measure the extent of the banking sector’s vulnerability to potential systemic risks that may result from these shocks. The conducted tests have demonstrated the Egyptian banking sector’s resilience in the face of the various shocks, as well as the effectiveness of the CBE’s macroprudential and microprudential policies in supporting financial stability.
It is noteworthy that this annual meeting is of great significance to policymakers and decision-makers in central banks, financial and banking institutions, as well as senior banking supervision officials in the Arab region, being a periodic high-level forum, bringing distinguished expertise and high-level officials together to discuss the key developments in financial stability issues and regulatory legislations. The annual meeting also contributes to generating valuable insights that are translated into effective decisions aimed at enhancing financial stability in Arab countries.