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SAMA Governor: Law on Treatment of SIFIs Maintain Sector Stability

Governor of the Saudi Arabian Monetary Authority (SAMA), Ahmed al-Kholifey (Reuters)
Governor of the Saudi Arabian Monetary Authority (SAMA), Ahmed al-Kholifey (Reuters)
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SAMA Governor: Law on Treatment of SIFIs Maintain Sector Stability

Governor of the Saudi Arabian Monetary Authority (SAMA), Ahmed al-Kholifey (Reuters)
Governor of the Saudi Arabian Monetary Authority (SAMA), Ahmed al-Kholifey (Reuters)

The Saudi Cabinet’s approval for the law on the treatment of systemically important financial institutions (SIFIs) allows the Saudi Central Bank (SAMA) to effectively monitor such institutions, achieve the public good, and keep abreast of international best practices, announced SAMA Governor Ahmed al-Kholifey.

Kholifey stressed that this step will help maintain the financial sector’s stability and insulate the financial system against any negative impact, in line with the G20 and Financial Stability Board recommendations.

He explained that SAMA had conducted earlier a thorough study of the regulatory framework for the treatment of SIFIs, to analyze the best practices and relevant international standards, and find the regulatory framework that matches the local environment and national economy.

The new regulation has a special nature with regard to the application of its terms to specific entities and cases, and the tools it provides to fulfill its targets.

It does not cover other financial institutions, subject to SAMA supervision, which are not classified as “important institutions” as per the bank’s decision.

The Central Bank will set special standards for the institutions under its supervision pursuant to the related laws that take into account the size of the institution, its complexity, and associated risks.

The system aims to enable SAMA to take various actions to maintain the stability and soundness of the financial sector, protect the deposits and assets of customers as well as of insurance policyholders.

In addition, it ensures the continuity of the necessary activities of financial institutions and reduces dependence on government subsidies.

The system also includes special provisions directing important institutions to develop a “recovery plan” in case of insolvency or potential insolvency.

In that case, SAMA will set a “treatment plan”, including actions to be taken when an institution becomes subject to treatment, in order to achieve the aforementioned objectives.

The law provisions grant the competent authorities special powers when taking actions for treatment, including the approval of the Council of Economic and Development Affairs, ahead of implementation by the institution.

The system became a necessity in the wake of the global financial crisis of 2008, which prompted the G20 to issue its recommendations to the Financial Stability Board to review and analyze the causes of the crisis.

It was concluded that establishing and developing laws that enable regulatory agencies to intervene quickly and effectively to avoid crises affecting the stability of the financial system is very crucial.

The Financial Stability Board then issued the “Key Attributes of Effective Resolution Regimes for Financial Institutions” which was classified by the 2011 G20 Cannes Summit, as new international characteristics for frameworks for treating important financial institutions.

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Business

G7 Trade Talks Target Critical Minerals as US-EU Tariff Rift Strains Unity

(L-R): EU commissioner for trade and economic security Maros Sefcovic, German Economy and Energy Minister Katarina Reiche, British State Secretary in charge of Trade Peter Kyle, US representative for Trade Jamieson Greer, French minister for trade Nicolas Forissier, Canadian state secretary in charge of international trade Maninder Sidhu, Italian Vice-Minister of Foreign Affairs and International Cooperation Maria Tripodi and Japanese Foreign Affairs delegate Minister Iwao Horii and Japanese Economy and Trade Minister Ryosei Akazawa prepare to pose for a group picture during the G7 Trade ministerial meeting in Paris, France, 06 May 2026. EPA/CHRISTOPHE PETIT TESSON / POOL
(L-R): EU commissioner for trade and economic security Maros Sefcovic, German Economy and Energy Minister Katarina Reiche, British State Secretary in charge of Trade Peter Kyle, US representative for Trade Jamieson Greer, French minister for trade Nicolas Forissier, Canadian state secretary in charge of international trade Maninder Sidhu, Italian Vice-Minister of Foreign Affairs and International Cooperation Maria Tripodi and Japanese Foreign Affairs delegate Minister Iwao Horii and Japanese Economy and Trade Minister Ryosei Akazawa prepare to pose for a group picture during the G7 Trade ministerial meeting in Paris, France, 06 May 2026. EPA/CHRISTOPHE PETIT TESSON / POOL
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G7 Trade Talks Target Critical Minerals as US-EU Tariff Rift Strains Unity

(L-R): EU commissioner for trade and economic security Maros Sefcovic, German Economy and Energy Minister Katarina Reiche, British State Secretary in charge of Trade Peter Kyle, US representative for Trade Jamieson Greer, French minister for trade Nicolas Forissier, Canadian state secretary in charge of international trade Maninder Sidhu, Italian Vice-Minister of Foreign Affairs and International Cooperation Maria Tripodi and Japanese Foreign Affairs delegate Minister Iwao Horii and Japanese Economy and Trade Minister Ryosei Akazawa prepare to pose for a group picture during the G7 Trade ministerial meeting in Paris, France, 06 May 2026. EPA/CHRISTOPHE PETIT TESSON / POOL
(L-R): EU commissioner for trade and economic security Maros Sefcovic, German Economy and Energy Minister Katarina Reiche, British State Secretary in charge of Trade Peter Kyle, US representative for Trade Jamieson Greer, French minister for trade Nicolas Forissier, Canadian state secretary in charge of international trade Maninder Sidhu, Italian Vice-Minister of Foreign Affairs and International Cooperation Maria Tripodi and Japanese Foreign Affairs delegate Minister Iwao Horii and Japanese Economy and Trade Minister Ryosei Akazawa prepare to pose for a group picture during the G7 Trade ministerial meeting in Paris, France, 06 May 2026. EPA/CHRISTOPHE PETIT TESSON / POOL

Group of Seven trade ministers meeting in Paris on Wednesday sought common ground on securing critical mineral supplies that are dominated by China, but fresh US tariff threats against European Union-made cars risked straining unity.

France wants critical minerals supplies to be among the most concrete deliverables during its G7 presidency as ministers prepare for a leaders' summit in mid-June, Foreign Trade Minister Nicolas Forissier ‌said as ‌he arrived for talks.

"I believe we will ‌make ⁠very concrete progress ⁠on rare earths and critical minerals, securing our supply chains and ensuring we are not held hostage by certain countries," he said.

Officials involved in the discussions said there was broad agreement on the need to reduce reliance on China, but significant differences remained about how to do so, said Reuters.

G7 unity is also being ⁠tested by comments from US President Donald Trump, who ‌said Washington would raise tariffs on ‌EU-made cars to 25% from 15%, arguing that Brussels was ‌not complying with a trade deal that was agreed upon ‌in Turnberry, Scotland, last year.

German Economy Minister Katherina Reiche said that she was in intensive talks with US officials over the tariffs. Germany's export-dependent automotive sector has already been under strain from weakening demand in China, ‌slower global growth and higher input and labor costs.

EU Trade Commissioner Maros Sefcovic said he and ⁠US Trade Representative ⁠Jamieson Greer had discussed the Turnberry agreement at a meeting in Paris on Tuesday and that he would be heading to the European Parliament, where negotiations on EU legislation related to the trade deal will take place later on Wednesday.

"We both clearly concluded that it's important to respect the deal from Turnberry from both sides, so we have to deliver on what was promised in Scotland," Sefcovic said.

The trade ministers are also expected to discuss industrial overcapacity - China being the main source - and reform of the World Trade Organization, Forissier said.

Business

Gulf Markets Higher as US-Iran Ceasefire Holds

An investor watches a stock screen at the Saudi Stock Exchange in Riyadh (AFP)
An investor watches a stock screen at the Saudi Stock Exchange in Riyadh (AFP)
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Gulf Markets Higher as US-Iran Ceasefire Holds

An investor watches a stock screen at the Saudi Stock Exchange in Riyadh (AFP)
An investor watches a stock screen at the Saudi Stock Exchange in Riyadh (AFP)

Saudi Arabia's ⁠benchmark stock ⁠index rose 0.4% on Wednesday, with most constituents trading in positive territory. Gains were led by information technology, materials and healthcare stocks.

Saudi Arabian Mining Co added 4.5%, while Arabian Mills for Food Products surged 8% after reporting a 32% rise in first-quarter net profit.

US President Donald Trump said he would briefly pause an operation escorting ships through the Strait of Hormuz, a key waterway that carries about a fifth of global oil supplies and has been blockaded by Iran since late February, triggering a global energy crisis.

So the fragile US-Iran ceasefire held firm despite a fresh flare-up in tensions, allowing investors to turn their attention back to corporate earnings.

Dubai's benchmark stock index rose 1.5%, rebounding from losses in the previous session.

Among individual stocks, blue-chip developer Emaar Properties gained 1.7%, while Dubai's largest lender, Emirates NBD, added 1.5%.

The Abu Dhabi benchmark index advanced 0.5%, with most constituents trading higher. ⁠Gains were led by utilities, healthcare and technology shares.

Presight AI Holding jumped 5%, while Alpha Dhabi climbed 2.3%.

The Qatari benchmark index edged up 0.3%, as most stocks traded higher. Industries Qatar gained 0.7%, while Qatar Fuel Co added 0.6%.

Business

Saudi Non-Oil Private Sector Defies ‘Hormuz Winds’, Regains Growth Momentum

A commercial street in Riyadh (AFP) 
A commercial street in Riyadh (AFP) 
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Saudi Non-Oil Private Sector Defies ‘Hormuz Winds’, Regains Growth Momentum

A commercial street in Riyadh (AFP) 
A commercial street in Riyadh (AFP) 

Saudi Arabia’s non-oil private sector posted a notable positive shift in April 2026, regaining growth momentum despite escalating geopolitical pressures and disruptions to international shipping routes — described as the “winds of Hormuz” — that affected supply chains and market expectations.

The Riyad Bank Purchasing Managers’ Index (PMI) rose to 51.5 points, surpassing the neutral 50-point mark. The recovery reflected companies’ ability to increase output levels in response to an influx of new business and progress on existing projects, despite continuing geopolitical challenges in the region and ongoing global supply chain disruptions that continued to weigh on customer spending decisions.

In this context, Riyad Bank Chief Economist Naif Alghaith said the results confirmed that the non-oil sector remained on a constructive and resilient trajectory, supporting the strategic goals of economic diversification under Saudi Vision 2030.

He added that the return of the index to expansion territory demonstrated that underlying business conditions remained fundamentally strong, with domestic demand and purchasing power offsetting the noticeable weakness in export orders. This, he noted, highlighted the growing importance of the Kingdom’s domestic economic engine in reducing reliance on external cycles.

Operationally, April saw a rapid and unprecedented increase in cost burdens, with input prices rising at the fastest pace since the survey began in August 2009. Sharp increases in raw material prices, shipping costs and logistics expenses resulting from regional disruptions pushed companies to implement near-record increases in selling prices in an effort to pass costs on to customers.

Alghaith said supply chain dynamics remained a key area of focus, particularly as delivery times continued to lengthen, prompting companies to adopt proactive behavior by increasing inventories as a precautionary measure to ensure business continuity.

Although the pace of overall business expansion remained slow by historical standards due to investor and customer caution surrounding the conflict in the Middle East, future expectations remained optimistic. The survey showed an improvement in business confidence regarding activity over the next 12 months, driven by long-term expansion prospects and major domestic infrastructure projects.

Alghaith said the Kingdom’s stable and robust economic fundamentals positioned it strongly to sustain long-term growth and stability, adding that optimism and strong domestic demand continued to reinforce confidence in Saudi Arabia’s economic transformation path.

For his part, Osama bin Ghanem Al-Obaidy, adviser and professor of commercial law, told Asharq Al-Awsat that the rise in the Purchasing Managers’ Index reflected the ability of Saudi companies to deal with the Strait of Hormuz crisis and its repercussions on the economy and global supply chains.

He said the improvement was driven by increased domestic demand, national economic diversification programs, Vision 2030 projects and infrastructure development, as well as stronger purchasing activity, reflecting the growing positive momentum of the Kingdom’s non-oil economic activities.

Al-Obaidy added that the improvement came despite mounting cost pressures resulting from higher raw material prices, transportation costs and rising wages.