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RECOMMENDATIONS OF THE UNION OF ARAB BANKS TO OVERCOME THE CORONA CRISIS: TRANSPARENCY AND ADJUSTMENT OF LOAN ENTITLEMENTS DinarDailyUpdates?bg=330099&fg=FFFFFF&anim=1

RECOMMENDATIONS OF THE UNION OF ARAB BANKS TO OVERCOME THE CORONA CRISIS: TRANSPARENCY AND ADJUSTMENT OF LOAN ENTITLEMENTS

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RECOMMENDATIONS OF THE UNION OF ARAB BANKS TO OVERCOME THE CORONA CRISIS: TRANSPARENCY AND ADJUSTMENT OF LOAN ENTITLEMENTS Empty RECOMMENDATIONS OF THE UNION OF ARAB BANKS TO OVERCOME THE CORONA CRISIS: TRANSPARENCY AND ADJUSTMENT OF LOAN ENTITLEMENTS

Post by claud39 on Sat May 09, 2020 1:50 pm

RECOMMENDATIONS OF THE UNION OF ARAB BANKS TO OVERCOME THE CORONA CRISIS: TRANSPARENCY AND ADJUSTMENT OF LOAN ENTITLEMENTS







09/2020








RECOMMENDATIONS OF THE UNION OF ARAB BANKS TO OVERCOME THE CORONA CRISIS: TRANSPARENCY AND ADJUSTMENT OF LOAN ENTITLEMENTS %D8%AA%D9%88%D8%B5%D9%8A%D8%A7%D8%AA-%D8%A7%D8%AA%D8%AD%D8%A7%D8%AF-%D8%A7%D9%84%D9%85%D8%B5%D8%A7%D8%B1%D9%81-%D8%A7%D9%84%D8%B9%D8%B1%D8%A8%D9%8A%D8%A9-%D9%84%D8%AA%D8%AE%D8%B7%D9%8A-%D8%A3%D8%B2%D9%85%D8%A9-%D9%83%D9%88%D8%B1%D9%88%D9%86%D8%A7-%D8%A7%D9%84%D8%B4%D9%81%D8%A7%D9%81%D9%8A%D8%A9-%D9%88%D8%AA%D8%B9%D8%AF%D9%8A%D9%84-%D8%A7%D8%B3%D8%AA%D8%AD%D9%82%D8%A7%D9%82%D8%A7%D8%AA-%D8%A7%D9%84%D9%82%D8%B1%D9%88%D8%B6










The Research and Studies Department of the Union of Arab Banks issued a long report highlighting international measures to face the repercussions of the Corona pandemic, and issued recommendations to Arab banks and proposals for regulatory bodies to overcome the crisis with minimal losses.




The report reviewed the impact of the corporate sector on the repercussions of the pandemic, due to the large level of global interdependence in manufacturing and distribution operations, pointing out that the interruption of economic activity caused liquidity problems for companies, and this turned into a solvency problem, and similar problems for banks, and with a significant decrease in cash flows, explaining that companies Around the world, Arab countries struggle to pay the salaries of their employees and their suppliers ’dues, and pay their loans to their banks, and that companies are expected to face a problem of solvency, once their cash reserves have been exhausted.




The report shed light on the harm suffered by companies that do not have direct access to finance (in all its forms), including default and bankruptcy, pointing to most of the major creditors of companies Arab are banks, who must build provisions and provisions for loan losses, and therefore may Suffer from a deterioration in capital adequacy.




The report stressed that the lack of liquidity among clients will lead to a significant decline in banks' cash flows, which may lead to the banking sector facing serious challenges represented by an unprecedented wave of non-performing clients, an increase in provisions for loan losses, and thus a decrease in profit rates.




The report reviewed the international measures taken by a number of central banks to face the crisis, including the European Central Bank's re-recommendation to banks regarding the distribution of non-payment of dividends for the fiscal years 2019 and 2020, and its announcement of new funds to open lending facilities directed to the affected industries, and to help small and medium-sized companies. With the aim of contributing to the stability of production, employment and consumer spending.




European central banks have granted unlimited credit lines at zero cost to banks to bypass any liquidity shortage, and European regulators have begun to indulge in some liquidity, adequacy, allocations and regulatory standards to encourage banks to lend to crisis sectors, as well as interest rate cuts and repo operations (repurchases) Long-term aim to drive lending activity, as happened in India, and anti-epidemic bonds to support local companies and help them continue, such as the purchase of a large group of Chinese state-owned bonds issued by Chinese companies Intention, as well as the relief packages policy, announced by the International Monetary Fund.




On the Arab level, social divergence policies have led to a stoppage of economic activity, and to mitigate the effects of this stoppage, governments have offered huge and diversified support packages to prevent the collapse of private sector companies and reduce the pressure of declining revenues and reduce layoffs, but this is expected to lead to a credit crunch, as High defaults may make it difficult for banks to provide more credit, thereby speeding up bankruptcies, leading to more defaults.




One of the risks that these countries are expected to face is the high return on government debt.

The report recommended Arab central banks to support domestic demand and enhance confidence in the markets by facilitating monetary conditions, ensuring smooth flow of credit to economic sectors, enhancing liquidity in financial markets, and expanding long-term lending.




And came from the recommendations of the Union of Arab Banks to the supervisory authorities to face the repercussions of the Corona pandemic, not to change the rules currently used, because changing mechanisms and rules during periods of crisis may cause increased pressure and turmoil, and the use of preventive margins that were built during previous periods, where most of the Arab banks during The past periods by building capital reserves and high liquidity, which may help them to face liquidity pressures and declining revenues resulting from the lack of collection of loan maturities, and the supervisory authorities must adopt transparency regarding the use of capital and liquidity reserves. Credit Hyphen provide banking, while avoiding any negative consequences for the banks.




The recommendations included adjusting loan entitlements, after the economic repercussions of the Corona virus weakened the ability of borrowers to meet their obligations to banks, which could weaken the banks ’safety and stability.




The report recommended not to conceal operations losses, since it is expected that the losses will affect banks, transparency will help to create conditions for re-launching once the repercussions of the current crisis are over, and to strengthen communication mechanisms, by encouraging the establishment of an ongoing dialogue between banks and regulatory and oversight bodies, especially in light of These situations and unprecedented challenges.







claud39
claud39
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