SAMA Governor: Law on Treatment of SIFIs Maintain Sector Stability

SAMA Governor: Law on Treatment of SIFIs Maintain Sector Stability

The Saudi Cabinet's approval for the law on the treatment of systemically important financial institutions (SIFIs) allows the Saudi Central Bank (SAMA) to effectively monitor such institutions, achieve the public good, and keep abreast of international best practices, announced SAMA Governor Ahmed al-Kholifey.

Kholifey stressed that this step will help maintain the financial sector's stability and insulate the financial system against any negative impact, in line with the G20 and Financial Stability Board recommendations.

He explained that SAMA had conducted earlier a thorough study of the regulatory framework for the treatment of SIFIs, to analyze the best practices and relevant international standards, and find the regulatory framework that matches the local environment and national economy.

The new regulation has a special nature with regard to the application of its terms to specific entities and cases, and the tools it provides to fulfill its targets.

It does not cover other financial institutions, subject to SAMA supervision, which are not classified as “important institutions” as per the bank's decision.

The Central Bank will set special standards for the institutions under its supervision pursuant to the related laws that take into account