Abu Dhabi: Kuwait's central bank is expected to introduce an upgraded risk assessment system for off-site surveillance of banks as well as up-to-date stress tests and early warning systems in 2011, the regulator's top official said.
Central Bank of Kuwait Governor Shaikh Salem Abdul Aziz Al Sabah told Zawya Dow Jones in an e-mailed reply to questions that it was in the central bank's main interest this year "to improve the ability of the banks in terms of their managing various risks, specifically improvements to their internal risk management systems."
Kuwaiti lenders, like others in the region, were hit hard by the fallout from the world financial crisis, leading the country's central bank in 2008 to guarantee all local bank deposits.
Shaikh Salem said as part of the central bank's plans, various supervisory tools "are to be introduced or enhanced in 2011 to meet these challenges... including an upgraded risk assessment system for off-site surveillance of banks plus use of up-to-date stress testing and early warning systems, taking into account macro and micro factors."
The central bank also plans to set up "a ‘financial stability unit' with the aim to safeguard financial stability.
