Efforts to Reach a Unified Measurement Standard for Financial Inclusion in Arab Countries

The AMF sees financial inclusion a key policy objective to stimulate socio-economic wellbeing, equality, and shared prosperity, as well as to strengthen financial stability. (Asharq Al-Awsat)
The AMF sees financial inclusion a key policy objective to stimulate socio-economic wellbeing, equality, and shared prosperity, as well as to strengthen financial stability. (Asharq Al-Awsat)
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Efforts to Reach a Unified Measurement Standard for Financial Inclusion in Arab Countries

The AMF sees financial inclusion a key policy objective to stimulate socio-economic wellbeing, equality, and shared prosperity, as well as to strengthen financial stability. (Asharq Al-Awsat)
The AMF sees financial inclusion a key policy objective to stimulate socio-economic wellbeing, equality, and shared prosperity, as well as to strengthen financial stability. (Asharq Al-Awsat)

Director-General and Chairman of the Board of Directors of the Arab Monetary Fund (AMF) Abdul Rahman Al-Hamidy revealed efforts aimed at reaching a unified standard among Arab countries for measuring financial inclusion.

In remarks to Asharq Al-Awsat, Al-Hamidy underlined the importance of financial inclusion, as a key policy objective to stimulate socio-economic wellbeing, equality, and shared prosperity, as well as to strengthen financial stability.

“We are harnessing the current capabilities to advance financial inclusion because of its importance in creating jobs, and providing opportunities for young people, especially since the youth make up 60 percent of the Arab population,” he said.

Al-Hamidy explained that such efforts would make financial services accessible, appropriate, and affordable to the region’s population living in promising and remote areas, which in turn would contribute to sustainable development, in accordance with the UN Sustainable Development Goals (SDGs).

In this context, the Fund moves and coordinates with all Arab countries to reach a unified standard for measuring financial inclusion, he underlined.

On the AMF support for Arab countries, Al-Hamidy said eight Arab countries have benefitted from the loans system since the start of the Covid-19 pandemic until the first half of 2022. He explained that the value of the loans granted by the AMF have exceeded two billion dollars.

Al-Hamidy touched on the capabilities of the central banks in the Arab Gulf countries, saying: “They have reached advanced stages, and this helps them more in financial inclusion, by enabling everyone to access the financial sector…”

He highlighted the capabilities of the Saudi Central Bank, which he said surpassed global levels, in terms of technology and digital currencies.

Meanwhile, the second Arab-British Economic Summit 2022 will be held in London this Wednesday, under the slogan “Developing a Common Vision.”

Organized by the Arab-British Chamber of Commerce, the summit will be attended by more than 600 economic and financial figures, and aims to strengthen the strategic partnership between the United Kingdom and the Arab countries. Gatherers will also discuss renewable energy, the education and health sectors, the banking and financial revolution, and the promotion of digital cooperation.



ECB's Lagarde Renews Integration Call as Trade War Looms

FILE PHOTO: European Central Bank President Christine Lagarde and Governor of the Bank of Finland Olli Rehn arrive at the non-monetary policy meeting of the ECB's Governing Council in Inari, Finnish Lapland, Finland February 22, 2023. Lehtikuva/Tarmo Lehtosalo via REUTERS//File Photo
FILE PHOTO: European Central Bank President Christine Lagarde and Governor of the Bank of Finland Olli Rehn arrive at the non-monetary policy meeting of the ECB's Governing Council in Inari, Finnish Lapland, Finland February 22, 2023. Lehtikuva/Tarmo Lehtosalo via REUTERS//File Photo
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ECB's Lagarde Renews Integration Call as Trade War Looms

FILE PHOTO: European Central Bank President Christine Lagarde and Governor of the Bank of Finland Olli Rehn arrive at the non-monetary policy meeting of the ECB's Governing Council in Inari, Finnish Lapland, Finland February 22, 2023. Lehtikuva/Tarmo Lehtosalo via REUTERS//File Photo
FILE PHOTO: European Central Bank President Christine Lagarde and Governor of the Bank of Finland Olli Rehn arrive at the non-monetary policy meeting of the ECB's Governing Council in Inari, Finnish Lapland, Finland February 22, 2023. Lehtikuva/Tarmo Lehtosalo via REUTERS//File Photo

European Central Bank President Christine Lagarde renewed her call for economic integration across Europe on Friday, arguing that intensifying global trade tensions and a growing technology gap with the United States create fresh urgency for action.
US President-elect Donald Trump has promised to impose tariffs on most if not all imports and said Europe would pay a heavy price for having run a large trade surplus with the US for decades.
"The geopolitical environment has also become less favorable, with growing threats to free trade from all corners of the world," Lagarde said in a speech, without directly referring to Trump.
"The urgency to integrate our capital markets has risen."
While Europe has made some progress, EU members tend to water down most proposals to protect vested national interests to the detriment of the bloc as a whole, Reuters quoted Lagarde as saying.
But this is taking hundreds of billions if not trillions of euros out of the economy as households are holding 11.5 trillion euros in cash and deposits, and much of this is not making its way to the firms that need the funding.
"If EU households were to align their deposit-to-financial assets ratio with that of US households, a stock of up to 8 trillion euros could be redirected into long-term, market-based investments – or a flow of around 350 billion euros annually," Lagarde said.
When the cash actually enters the capital market, it often stays within national borders or leaves for the US in hope of better returns, Lagarde added.
Europe therefore needs to reduce the cost of investing in capital markets and must make the regulatory regime easier for cash to flow to places where it is needed the most.
A solution might be to create an EU-wide regulatory regime on top of the 27 national rules and certain issuers could then opt into this framework.
"To bypass the cumbersome process of regulatory harmonization, we could envisage a 28th regime for issuers of securities," Lagarde said. "They would benefit from a unified corporate and securities law, facilitating cross-border placement, holding and settlement."
Still, that would not solve the problem that few innovative companies set up shop in Europe, partly due to the lack of funding. So Europe must make it easier for investment to flow into venture capital and for banks to fund startups, she said.