Mohammad Y Al-Hashel: Regulation and supervision - from old fault lines to emerging concerns

Keynote speech by His Excellency Dr Mohammad Y Al-Hashel, Governor of the Central Bank of Kuwait, at the 14th High Level Meeting for the Middle East & North Africa Region, jointly organized by the Basel Committee on Banking Supervision, the Financial Stability Institute and the Arab Monetary Fund, Abu Dhabi, 11 December 2019.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Your Excellencies, Distinguished Guests,

Sabah-al-khair and a very good morning.

I am delighted to return to this forum for the third time in a row, and I am grateful to H.E. Dr. Abdulrahman A. Al Hamidy for inviting me to speak before this august gathering.

Taking this opportunity today, I would like to touch upon two areas. First, where the years of regulatory reforms have left us in terms of addressing the fault lines that global financial crisis (GFC) laid bare, and second, what are the emerging regulatory & supervisory concerns going forward.

Fixing the old fault lines

Let me start with the first question: where the years of regulatory reforms have left us?

It is well over a decade since the GFC took the financial world by storm. Around ten years back, in 2009, the world was reeling from a financial crisis that was unique in both its origin and scale. Epicenter of the crisis was advanced countries and the US in particular. And in terms of scale, as research by BIS has highlighted, cumulative output loss since the GFC has been a hefty 25% of the world's GDP, excluding the enormous social costs associated with high unemployment and lost output.