‘QCB prepares to launch Second Strategic Plan up to 2022’

Qatar Central Bank is preparing to launch its Second Strategic Plan for financial sector regulation up to 2022, HE the QCB Governor Sheikh Abdullah bin Saoud al-Thani has said.

The strategy, he said is a result of successful cooperation between three regulatory bodies. Those bodies are the central bank, Qatar Financial Markets Authority (QFMA), and Qatar Financial Center Regulatory Authority. The strategy is also implemented in the context of Qatar National Vision 2030 and the active role the financial and banking sector plays in diversifying the economy and increasing the contribution of the private sector in Gross Domestic Product.

He said the new strategy builds on its predecessor. It also looks to enhance regulatory cooperation between different bodies. That cooperation will include work on the application of international standards in the banking sector, as work will continue on implementing Basel III.

Cooperation will extend to enhancing the infrastructure of the financial sector, enhancing the market's efficiency, and protecting users of financial and investment services.

He noted that the new strategy involves the latest methods of discovering money laundering and terrorism financing. It also focuses on human capital in the financial sector, by looking to develop highly-professional cadres.

With regard to the issuance of government debt instruments such as bonds, treasury bills and sukuk, Sheikh Abdullah said the bank issues government debt instruments on behalf of the government and therefore the proceeds do not return to the bank. QCB has started to issue these instruments for monetary policy reasons such as managing liquidity in the banking system. The government also uses it to finance the budget as one of the available sources.

Regarding reports about the refusal (by many exchange companies) to sell the dollar after the siege and whether the Qatar Central Bank had any role in this, the Governor said that he did not believe there were any financial or banking institution in Qatar, including money exchange companies, that stopped selling the dollar or any other currency.

Some of those companies might have tried to take advantage of the crisis, but the bank's strict instructions in this regard acted as a deterrent to such behaviour.

Regarding the role played by the Qatar Central Bank in banking governance, which is attracting a great deal of attention of the regional and international supervisory authorities and control, he pointed out that the functions of the QCB in this regard include, in accordance with the provisions of the Law No. 13 of 2012, supervising all financial institutions licensed to practice financial services and activities to enhance the financial stability system.

He highlighted the bank's commitment to following the best international practices when issuing regulatory directives to banks, other financial institutions and insurance companies.

He referred to a number of examples carried out by the QCB in this regard. Those included its decision to regulate the shares ownership of the financial institutions subject to its control and listed on Qatar Exchange.

There were also instructions issued that the bank or the investment company founder or manager of the investment fund and all its subsidiaries may not own more than a 10% of the total shares outstanding in the fund, and to complete the application of Basel III criteria, particularly second pillar, on capital adequacy and internal capital adequacy assessment procedures.

He also pointed out that Qatar Central Bank has issued the principles of corporate governance for the insurance companies. It included the general framework, rules, regulations and comprehensive procedures through which insurance companies carry out their activities and management, its structure, the relationship between the different parties and the distribution of powers and responsibilities, in particular members of the board of directors, executives, shareholders, stakeholders or customers.