Business | Banking
Gulf banks escape direct hit from crisis
Gulf Arab banks have so far escaped a serious, direct hit from the US banking crisis and the financial system in the peninsula was not at risk, key central bank governors said on Tuesday.
- Reuters
- Published: 23:52 September 16, 2008
Jeddah: Gulf Arab banks have so far escaped a serious, direct hit from the US banking crisis and the financial system in the peninsula was not at risk, key central bank governors said on Tuesday.
Banks in Saudi Arabia, the biggest state in the six-member Gulf Cooperation Council, appear to have avoided any serious damage, said Saudi central bank governor Hamad Saud Al Sayyari, who cautioned, however, that the crisis was only one day old.
"At the moment ... I don't see any risk but this crisis has just started yesterday," he said on the sidelines of a central bank gathering in the Red Sea city of Jeddah.
Gulf Arab bank stocks have plummeted in recent days due to fear of fallout in the financial system stemming from the US fin-ancial crisis that started with the collapse of Lehman Brothers.
Systemic risk
Qatar's central bank governor Shaikh Abdullah Bin Saud Al Thani said banks in Qatar had "no exposure at all" to Lehman Brothers or Merrill Lynch.
UAE Central Bank Governor Sultan Nasser Al Suwaidi and Oman governor Hamoud Bin Sangur Al Zadjali echoed those sentiments when asked if there was systemic risk.
Separately, the head of the Kuwaiti banking association said he doubted lenders in his country faced exposure problems due to failed or troubled US banks.
"I don't know the numbers but investments of banks outside Kuwait are minimal.
"I doubt banks will be affected," Abdul Majeed Al Shatti, who is also the chairman of Commercial Bank of Kuwait, told Reuters.
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