The Union of Arab Banks is set to launch the Arab-American banking dialogue on 18 April at the Federal Reserve Bank of New York.
The event will be attended by representatives of Egypt, Lebanon, and the United States, according to Secretary-General of the Union of Arab Banks Wissam Fattouh.
Fattouh met with chairman of the Union of Arab Banks Mohamed Barakat a few days ago with a number of US officials, including officials from the US Department of the Treasury, to prepare for the dialogue.
The dialogue will be held in cooperation with the Federation of Egyptian Banks and the International Monetary Fund, with support from the US Treasury Department, Fattouh said.
He added that this dialogue comes amid the interest and willingness of US authorities to cooperate with the Arab banking sector. It will discuss cooperation between Arab banks and correspondent banks abroad, in addition to financing commercial operations and bank transfers, and the fight against money laundering and terrorism financing.
The Union of Arab Banks will issue this month the largest legal database for the banking, financial and investment legislations in the Arab states, in which 15 researchers, four judges, and 12 professors of law participated in conducting, Fattouh said.
This database will present the economic and financial legislations of 20 Arab states, including approximately 1,700 laws, with more than 29,000 articles. Furthermore, it will enable the presentation and comparison of details of legislations in Arab countries.
The database will be available in hard and soft copies, as well as via search engine, said Fattouh, stressing the importance of reading the economic laws and regulations in depth, as well as revising them, for the impact of doing so will advance the Arab economic situation.
Fattouh expects banks operating in the Arab region to face significant difficulties in 2016, especially in terms of providing the necessary liquidity to finance projects, which will reflect on their profits.
“All expectations indicate that the Arab governments, especially in the Gulf area, will reduce operations of pumping liquidity in the markets, as they are affected by conflict in the region and the crash of oil prices, which will negatively affect the banks’ activities”, Fattouh said.
He explained that Arab governments relied on their reserves to pump a lot of money to finance major infrastructure projects during 2015, which was positively reflected on banks, a scenario that will be difficult to repeat in 2016.
Banks in Saudi Arabia and the UAE own approximately 39% of the total assets of Arab banks; they are expected to be negatively affected by the current crash of oil prices, Fattouh said.
The current fluctuations in Arab currencies’ exchange rates against the dollar is another challenge facing Arab banks, he added. Alternatives for Arab governments to escape this crisis may lie in privatisation, and higher taxes, according to Fattouh.
He explained that privatisation, represented in selling public entities or part of them to the private sector, is not a goal in itself, but a means to overcome some problems; therefore, it is unnecessary unless there is a problem.
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