Financial crisis moves to Gulf Arab nations
October 26, 2008 at 9:24 PM EDT
KUWAIT CITY - Kuwait moved Sunday to prop up the country's second-largest
commercial bank and scrambled to protect depositors at other domestic banks,
dashing hopes the oil-rich Arab Gulf would emerge largely unscathed from the
global financial crisis.
The central bank halted trading in Gulf Bank shares because of high
derivatives losses, just a day after Gulf finance ministers said the
region's banks were insulated against the liquidity crisis that has rippled
through the global banking industry.
The Gulf Bank news also appeared to have pushed the Kuwaiti government to
take a step it has so far resisted - guaranteeing deposits. The country
currently makes no deposit guarantees.
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Gulf oil producers cite new urgency for monetary union
October 25, 2008 at 5:09 PM EDT
RIYADH - Gulf Arab oil producers said they had already taken adequate steps
to deal with the impact of the global financial crisis but that turmoil on
world markets had given new urgency to their plan for monetary union.
Finance ministers and central bank governors of the Gulf Co-operation
Council held an emergency meeting on Saturday to discuss co-ordination of
their response to a global downturn that threatens to brake their region's
six-year economic boom.
The states, preparing for a single currency by an unlikely 2010 deadline,
emerged from the meeting with few public statements on how they would work
together.
"The crisis proves how much we need a single currency and that a single
central bank should be a supervisory body."
Saudi Arabia, the United Arab Emirates and four other Gulf states have so
far adopted separate policy responses to defrost interbank lending and boost
confidence in their stock markets. The GCC also includes Qatar, Kuwait,
Bahrain and Oman.
Some Gulf states have guaranteed bank deposits, eased lending restrictions,
set up emergency funding facilities for their banks and invested money in
ailing stocks.
Gulf states are trying to give a renewed push to monetary union after the
plan was thrown into disarray by Oman's 2006 decision not to join and
Kuwait's 2007 move to drop a dollar peg it had agreed to keep in place until
the single currency was achieved.
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