CAIRO: The President of BNY Mellon, one of the largest global asset managers and the world’s largest securities servicing provider, gives his views in an exclusive interview with Oxford Business Group (OBG), the global publishing, research and consultancy firm.
Although regulators are looking to bring in common standards across the globe for capital requirements, some key players believe adjustments should be made for developing countries, according to Gerald L. Hassell, President of the Bank of New York Mellon Corporation.
Hassell acknowledged that universal standards made sense for global institutions trading securities across the world, saying: “Currently, each country and region has independent approaches and regulations for capital requirements, which makes for a very uneven playing field.
But he also pointed out that by implementing common standards worldwide, no allowance was made for the huge variation in capital levels in different countries. This, he explained, was why one school of thought was suggesting that developing countries should have adjusted standards. Hassell believes the key is for regulators to carefully consider harmonising the definitions of capital and capital requirements with a well-defined level of measurement.
Hassell was confident that investors will make a swift return to emerging markets, like Egypt, as the dust settles from the global downturn. He highlighted the fact that Egypt had weathered the financial storm reasonably well, thanks to the prudence and discipline of its financial institutions. Hassell added that Egypt was still enjoying growth and stability, both of which were important to investors. “The way the market has fared has brought renewed confidence to investors; as a result, investment will come back faster and stronger, he said.
Egypt should now focus on raising its profile among the global business community, according to Hassell, since this will bring the rewards of an expanded shareholder base. “A limited capital base combined with limited liquidity can stifle growth, he said. “Companies need to garner the support of other markets with instruments such as global depository receipts, which are shareholder-friendly, easy to trade in, tax-advantaged in most marketplaces and help create visibility to global investors.
Hassell was adamant that the MENA countries had the potential to attract global investors looking to channel their capital. “Due to the extremely low interest rate environment across the developed world, investors are anxiously seeking out prospects for growth, he said, “and I believe Egypt and MENA can offer that.
The wide-ranging article will feature in The Report: Egypt 2010, OBG’s forthcoming guide on the country’s business activity and investment opportunities. The report also includes interviews with Ahmed Nazif, Prime Minister of Egypt and Amr Moussa, Secretary-General of the Arab League. -OBG
The Report: Egypt 2010 will offer up-to-date analysis of political, macroeconomic and sectoral developments and will be available in print form and online.
