I welcome you to Dubai – United Arab Emirates at the GCC Regulators’ Summit.
This annual summit of GCC regulators provides an excellent platform for regulators and financial service professionals in the region to interact and exchange ideas of mutual interest.
We all know that the financial services industry is the backbone of any economy. This sector not only impacts the economic growth of the country but also influences the daily lives of its people. Therefore, regulators in each country have a challenging task of enforcing regulations which ensure that banks and financial service companies remain healthy and also contribute to the economic growth in different economic cycles.
Highly restrictive regulations may keep the system intact but would choke the economy and will not be beneficial in the long run. Similarly, the absence of effective regulations may lead to the collapse of the banking system affecting the economy and hurting the consumers.
I am sure all stakeholders support a regulatory regime which is conducive for the growth of business, protects the consumers and ensures the stability of the system in terms of liquidity and solvency of financial institutions. In their quest to find the right balance of regulatory framework, countries have been through alternate phases of tightening regulations and de-regulations.
In order to achieve the right balance within the regulatory framework, I believe a continuous dialogue between the regulators, government policy makers and the financial institutions is a must.
This consultative approach between regulators and banks would lead to a balance between sustainable economic growth and protecting the system. Collaboration and inclusion are key elements of the consultative approach which, in my view, will protect the interest of all stakeholders.
On our part, the UAE Banks Federation has seen the UAE Central Bank playing a positive role in this regard, taking a balanced approach on regulations, while encouraging growth and protecting the financial system.
They have been pro-active in conducting regular dialogue with the industry to ensure that regulations not only secure the long-term health of the banking system, but also protects consumers and help the economic growth of the country.
Compliance had always been an important function in the bank. However, in recent years with the tightening of regulations, particularly, in the AML and sanctions area, its criticality has increased manifold. Banks in many jurisdictions have paid heavy penalties for not complying to regulatory provisions. Compliance is not a revenue generating function but I consider it a revenue protecting centre as it helps the banks to save significant amounts in penalties and fines which otherwise would have reduced their profitability and eroded their reputation.
We believe two-way communication is the Way Forward and would encourage all banks and regulators to work together closely in the best overall interests of their consumers, their economies, and their countries.
I trust you will find this forum – both productive and constructive, and I hope our guests from abroad will also take the time to enjoy Dubai.
