KHALEEJ TIMES, Saturday, Sep 12, 2020 | Muharram 24, 1442
Central banks need to step up digital game
Emirates:
The governor of the Central Bank of the UAE highlighted the important
role of central banks in mitigating the repercussions of the Covid-19
pandemic in economies and underlined the structural trends in the banking
and financial industry accentuated by the present crisis.
Abdulhamid M. Saeed Alahmadi, who participated as a lead speaker at a virtual
meeting of governors from major emerging market economies organised by the Bank
for International Settlements, also stressed the importance of further
digitalisation and the delivery of financial services through new channels.
The meeting was attended by governors from across the globe to discuss policy
response and medium-term challenges arising from the Covid-19 pandemic in
emerging markets.
Alahmadi also highlighted that while capitalising on the benefits of
digitalisation, countries in emerging markets also need to address financial
inclusion and ensure that traditional banking channels remain available for
people of determination and elderly people.
He discussed that central banks in emerging markets need to think strategically
about the adequacy of their power to address crises such as the Covid-19
pandemic. Policy space may be more restricted in emerging markets, which calls
for a close policy coordination between fiscal and monetary authorities. An
additional discussion point included the broader issue of exiting from the
temporary regulatory relief measures developed to support the economy during the
pandemic.
Once economies are in a position to recover, central banks need to act in a
careful and phased manner, in order to avoid a sharp deterioration of credit
supply. Alahmadi closed his statement indicating that as a regulator, monitoring
credit quality and provisioning international best practices shall remain the
focus of central banks yet thriving for innovation to continue to promote
financial stability and protect the economy.
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