The panelists who included National Commercial Bank CEO Abdulkareem A. Abu Alnasr, International Institute for Management Development President John R. Wells, Carlyle Group co-founder and managing partner David Rubenstein and Deutsche Bank Group's former Managing Director and Chief Economist Norbert Walter, had a word of praise for the resilience shown by the Saudi economy due to its sound regulatory system. One speaker said the Saudi economy stood out during the crisis and could be a model for the countries reeling under recession.
Addressing the lessons learned and the way ahead for global financial institutions, the session talked about the way the new financial architecture is trying to tackle the exuberance and leverage of the global financial system at a time when the world economy is still in flux and much is required in order to bring stability to the global economy.
Alnasr covered the responsibility the financial institutions have toward society and the imperfect world of finance. He said 2009 was an "extremely challenging year" for banks and other financial institutions.
The global credit situation had its impact in this part of the world as well, but not to the extent the Western and advanced world suffered. "It's now for the banks to take new initiatives and look for lending opportunities.
Wells spoke about the need for corporations and executives to be transparent, fair and honest to society and shareholders. "It is important for everyone to see that corporations have to shape up and reform the way they do business and the way their balance sheets reflect that," he said.
Rubenstein said the US economy is "like a heart patient who takes time to recover." He said since the Great Depression a lot of leverage has gone into the system. "One should realize that excessive leverage can also slowdown the economy as was demonstrated in the global crisis," he said.
Walter addressed the issue of challenges that remains ahead in the global economy and the difficulty in getting the global economic system on a sound recovery path. "There is more government support to restructure the economy, but such emergency operations translate into nationalist and isolationist solutions," he cautioned.
He also warned that prosperity would be at risk if investments were not properly channelized.
Sfakianakis said that Saudi Arabia's financial system was sound and well and the banking system was not facing any crisis due to the proper regulation, which is in contrast to the difficulties banks face in the US and Europe. He added that the Kingdom's contribution to the global economic recovery had to be kept in mind. "Saudi Arabia contributes in many ways, in the form of remittances, overseas development assistance, which is among the highest in the world in GDP terms," he added.
Sfakianakis emphasized that Saudi Arabia has contributed more than $100 billion since 1974 unadjusted for inflation in the form of foreign aid. The Kingdom's contributions include the role it plays in the G20 and one of its founding members and being the only Arab country that with a permanent board seat at the IMF and World Bank. Also, Saudi Arabia's $400 billion expansion program has a 40-60 percent import component. What is more, "over $65 billion the Kingdom has invested in increasing its capacity to 12.5 million barrels a day plus the billions of dollars of investments over the next few years in the oil and gas sector are a contribution to global oil supplies and eventually oil price stability that doesn't hinder the recovery efforts of the global economy," he said. "What more can Saudi Arabia do than what it has already done and continues to do?" he asked.
