Organized by the Arab Monetary Fund, the Financial Stability Institute, and the Basel Committee on Banking Supervision…
Mr. Hassan Abdalla, Governor of the Central Bank of Egypt, delivered the keynote speech on Wednesday at the 20th Annual High-Level Meeting on Financial Stability and Supervisory Priorities. The event is organized by the Arab Monetary Fund in cooperation with the Financial Stability Institute (FSI) and the Basel Committee on Banking Supervision of the Bank for International Settlements, and is being held in Abu Dhabi, UAE, continuing today (Thursday).
The meeting was attended by Mr. Khaled Mohamed Balama, Governor of the Central Bank of the United Arab Emirates; Dr. Fahd bin Mohamed Al-Turki, Director General and Chairman of the Arab Monetary Fund; Mr. Fernando Restoy, Chairman of the Financial Stability Institute; Mr. Neil Esho, Secretary General of the Basel Committee on Banking Supervision; as well as a large number of Arab central bank governors from Bahrain, Tunisia, Palestine, and Lebanon, alongside senior officials and experts.
In his speech, the Governor emphasized the importance of the topics under discussion, particularly financial stability and supervisory priorities in the Arab region, as fundamental pillars for achieving development ambitions amid the complex global economic transition marked by rising inflation, liquidity volatility, and accelerating geopolitical shifts. He noted that these challenges are intensified in the Arab region due to high public debt levels, ongoing fluctuations in exchange rates and oil prices, which directly affect public finances, economic activity, and investor expectations.
He explained that these challenges have imposed a greater role on central banks in safeguarding monetary stability, strengthening economic resilience, and building more flexible financial systems to ensure sustainable growth, absorb unexpected shocks, and maintain market confidence.
The Governor highlighted the rapid growth of non-bank financial institutions, whose share has risen to nearly 50% of global financial assets, making them important drivers of markets and tools for economic growth and financial inclusion, while also posing greater risks that require advanced and transparent regulatory frameworks.
He also pointed to the massive expansion in technological innovation, particularly the use of digital assets and stablecoins, whose value has doubled over the past three years and become influential in cross-border payments and transfers. He noted the major transformations driven by artificial intelligence, which offers opportunities to enhance analytical and supervisory capabilities, while also presenting risks such as regulatory divergence, bias, data protection, and increasing cyber threats—necessitating secure digital infrastructure and modern legislation.
The Governor further addressed the banking tensions witnessed globally in 2023, especially after four banks ceased operations, revealing shortcomings in traditional liquidity standards amid rapid digital withdrawals and instant fund transfers via electronic platforms. He explained that these crises stemmed from combined factors including weak governance, poor risk management, unsustainable business models, and insufficient supervisory oversight, underscoring the need to update stress tests, strengthen operational readiness, and apply proactive supervision capable of detecting risks early.
He concluded by stressing that financial stability challenges have become cross-border and cannot be addressed by any single country alone, making cooperation and coordination essential to build shared visions that enhance the resilience of Arab financial systems, strengthen their ability to face risks, and embrace innovation in service of development.
The meeting sessions are set to discuss several key topics, including emerging risks and trends in Arab financial systems, financial stability policies and growth support, development of supervisory processes, regulation of stablecoins, the role of artificial intelligence, and liquidity risk management.
