Arab banks have been able to increase their total balance sheets to $2.3 trillion despite the impact of the financial crisis, Adnan Ahmed Yousif, chairman of the Union of Arab Banks, has said.
“In the wake of the crisis, Arab and Islamic banks are required to continue adopting cautious policies in terms of lending and preserving liquidity,” he said at a lecture at the Dubai School of Government (DSG).
“Governments, in turn, are required to move quickly to establish a wide range of programmes that support and strengthen the banking system to enable it to play a natural role in fostering credit flows to businesses and households.
Yousif, who is also the president and chief executive of Al Baraka Banking Group (ABG), said it was unrealistic to hope the financial crisis could be entirely eliminated.
“What we need is a widely accepted and resilient financial system that is neither dependent on debt-based structures nor on usury. Such a system would help make crises such as this less frequent and less painful,” he said.
“Furthermore, we may be in need of an Arab version of the American Troubled Assets Relief Program (TARP) to address the problems posed by firms that are considered too big to fail.”