Central Bank of Egypt (CBE) Governor Hassan Abdalla called for stronger regional coordination to confront mounting global financial risks, in a keynote speech at the Arab Monetary Fund's (AMF) 20th High-Level Meeting in Abu Dhabi. The two-day gathering, which continues on Thursday, is organised by the AMF in partnership with the Financial Stability Institute and the Basel Committee on Banking Supervision at the Bank for International Settlements. It focuses on financial stability and regulatory and supervisory priorities Abdalla said the themes under discussion—financial stability and supervisory priorities—were central to supporting development ambitions at a time when the global economy is undergoing a complex transition marked by high inflation, liquidity swings and accelerating geopolitical tensions. These challenges, he added, are more acute in the Arab region amid elevated public debt levels and persistent volatility in exchange and oil prices. He said the shifting landscape has expanded the role of central banks in defending monetary stability, strengthening economic resilience and building more flexible financial systems able to sustain growth, absorb shocks and uphold market confidence. Abdalla pointed to the rapid growth of non-bank financial institutions, which now account for roughly half of global financial assets. Their expanding role, he said, offers opportunities to support economic growth and financial inclusion but also carries heightened risks that require more advanced and transparent oversight. He also highlighted the surge in technological innovation, including the spread of digital assets and stablecoins, whose market value has doubled over the past three years. These developments, along with the growing use of artificial intelligence, are reshaping payment systems, cross-border transfers and supervisory tools—but also raising concerns over regulatory gaps, data protection, bias and rising cyber threats. Abdalla referenced bank failures in 2023, when four institutions collapsed, exposing weaknesses in traditional liquidity standards amid rapid digital withdrawals. He said the crises reflected a combination of weak governance, poor risk management, unsustainable business models and insufficient oversight—factors that underscore the need to update stress tests, strengthen operational readiness and apply more proactive supervision. He concluded by stressing that financial-stability risks increasingly cross borders, making cooperation and policy coordination essential to building resilient Arab financial systems capable of managing risks while supporting innovation. Meeting sessions will also address emerging risks in Arab financial markets, stability policies to support growth, supervisory developments, stablecoin regulation, the role of artificial intelligence and liquidity-risk management. The AMF event brought together senior policymakers including Central Bank of the UAE Governor Khaled Mohamed Balama; AMF Director-General Fahad M. Alturki; Fernando Restoy, Chair of the Financial Stability Institute; and Neil Esho was appointed Secretary General of the Basel Committee on Banking Supervision (BCBS). A large group of Arab central bank governors from Bahrain, Tunisia, Palestine, and Lebanon also attended. Attribution: Amwal Al Ghad English
