Bank group calls for unified credit bureau in region

Dubai: The Union of Arab Banks (UAB) has proposed the creation of a unified credit bureau and risk management unit for the banks across the region.

"A unified credit bureau will strengthen the GCC financial sector and lead to greater transparency in the regional economies. Such a move will reduce the possibility of systemic risks to financial sector emerging from corporate frauds," Adnan Ahmad Yousuf, Chairman of UAB, told Gulf News on Monday.

A proposal to this effect was presented to the central bank governors recently. "The idea was accepted by the governors and the implementation of it will be a significant step towards data sharing and creation of a unified risk management system across the Gulf region," he said. The UAB chairman also suggested development of a draft unified accounting standards for Gulf and Arab banks, based on International Accounting Standards.

There are 420 banks in the 22 Arab countries with a total asset base of $1.91 trillion (Dh7 trillion). UAB has a membership of 340 banks.

Although the global financial crisis impacted banks across the region, Yousuf said Arab banks in general are not facing any major systemic risks.

"Though the financial crisis started with the subprime mortgage market in the US, it had its repercussions in the Gulf region affecting the asset quality and profitability of several banks across the region. Timely intervention by the central banks and governments has helped the banks to manage the risk effectively," he said.