GCC: Monetary union urgent

Dubai: Gulf Arab oil producers said they had already taken adequate steps to deal with the impact of the global financial crisis, but the turmoil on world markets has given new urgency to their plan for monetary union.

GCC finance ministers and central bank governors held an emergency meeting in Riyadhon Saturday to discuss coordination of their response to a global downturn that is threatening to halt their region's six-year economic boom.

The states, preparing for a single currency by an unlikely 2010 deadline, ended the meeting with few public statements on how they would work together.

"The GCC economy is in an excellent position and faces no liquidity crisis. There is enough liquidity and sufficient surplus of capital in the Gulf market," the ministers said. They also praised the existing monitoring regulations in the banking sector and their role in safeguarding the banking system.

Qatari Minister of Fin-ance Yousuf Kamal said, "The crisis proves how much we need a single currency and that a single central bank should be a supervisory body."

Replying to queries from Gulf News regarding the impact of the global financial crisis on ongoing efforts to introduce a common Gulf currency and formation of a GCC central bank, Kamal said the crisis would not lead to any delay in the scheduled launch of the currency or bank. "On the contrary, the concepts of a single Gulf currency and a central bank have attained greater significance in the wake of the global crisis. They will play a vital role in further enhancing coordination and cooperation in the financial sector among the GCC states," he said

The agenda for the meeting included discussion of new steps to shore up confidence in the banking sector.

-With inputs from agencies

Bush seeks agreement

US President George W. Bush, who will host a global summit on the financial crisis next month, said on Saturday that agreeing on common principles to reform regulators would be essential to preventing another disaster.

His comments came one day after a worldwide sell-off in stock markets amid growing fears of a global recession. Friday's session was the lowest closing level for all three major US stock indexes since the spring of 2003.

"In recent weeks, concerns about the availability of credit, the safety of financial assets, and the volatility of the stock market have made many families understandably anxious about their economic future," Bush said in his weekly radio address.

- Reuters

Should the policymakers have reacted earlier to the financial crisis? How will the delayed reaction affect the region's economy?