KUWAIT CITY, Nov 13: Several experts in economy affirmed that Kuwaiti banks escaped the major crises that hit the global financial system in previous years through the policy of Kuwait Central Bank, reports Al-Shahed daily.
In this context, economist Maitham Al-Shakhs stated that the banking sector is the most secure quarter in Kuwait at present, because they own large assets in excess of liabilities. He added the Kuwaiti banks were not affected by the financial turmoil brought about by the reduction in oil prices and the global economic crises.
He pointed to relevance of the strategy adopted by the Central Bank of Kuwait that obliges local banks to stick to the governance policy while enforcing the international criteria, indicating the policy helps the banks in applying the recommendations of Basel 3 Forum easily. Economic analyst Nawaf Al-Shaye stated the major role of Kuwait Central Bank is to oblige the local banks to enforce the governance policy.
He noted the banks are keen on enforcing the rules in order to obtain the best evaluation. He also expressed concern on the intention of some banks to merge with other banks outside Kuwait, especially as the step lacks the necessary study. He reiterated the integration may affect stability of the Kuwaiti banks due to the distinction between Kuwaiti laws and the laws of those countries.
Financial analyst Muhammad Thamer also said the governance policy constitute a small part of the system implemented by the Central Bank of Kuwait that contributed in reviving the economy over the past few years. He pointed out that the local banks attained 11 percent profits in the period, which boosted their financial assets.
He asserted the banks may have faced some troubles in 2008 due to the financial commitments to debtor companies but they surmounted the crisis in 2012. He added the Kuwaiti banks face a major challenge in exceeding the borders of Kuwait; thus, it is essential to study the possibility of integration by extending their wings so as to grow bigger.