Assistant Professor of Economics at Qatar University, Jalal Qannas, said, “Many Arab and Gulf sovereign funds are located in the United States of America and Europe, in search of profits and diversification of the economy, but they are located in places where there is risk that may have repercussions,” noting that following the sudden collapse of my bank. “Silicon Valley” and “Credit Suisse” shares fell in all Gulf countries, as well as the stock market.
In order to avoid the repercussions of the banking crisis on the Arab countries, Qannas saw in his interview with the episode (23/3/2023) of the “Scenarios” program, the necessity of switching to real investments and not staying in commercial investments and short profit.
For his part, Professor of Economics at the American College of Oakland, Mustafa Shaheen, expected that “some Arab countries will be affected by the banking crisis in the United States and Europe, especially Egypt, Sudan, Tunisia and Lebanon, as these countries will suffer from the high prices of the dollar and gold, and the rise in prices in general in exchange for the depreciation of the national currency.” “.
As for the Gulf countries, he described them as “one of the best economies in the world in terms of financial strength and indicators; like Qatar, Kuwait, Saudi Arabia and others, there are very huge financial reserves in dollars that can save any bank that is exposed to a crisis.”
A professor of economics at the American College of Oakland said, “The central banks in the Gulf are very strong, and they have very huge reserves of foreign exchange, but the problem in the Arab world is the need to get out of the framework of the traditional banking interest pattern of Islamic systems, such as the Musharaka and Murabaha systems, and this in turn requires the provision of standards.” other”.
On the other hand, the assistant professor of economics at Qatar University attributed the current banking crisis, specifically the sudden bankruptcy of the “Silicon Valley” bank, to financial control and raising the interest rate, and said that “this banking crisis will continue as long as the causes continue.”
He stressed that the causes of the crisis in “Silicon Valley”, a bank specialized in providing loans and facilities to emerging companies, especially in the technology sector, are due to the fact that “the bank was not under strict financial control,” noting that the US Central Bank raised interest rates to fight inflation, and affected That is what banks do.”
As long as central banks – as Kannas adds, “continue to target inflation that has its causes without focusing on financial stability, the problem of banks will continue.”
What happened in “Silicon Valley” is that the US Federal Reserve has raised interest rates regarding 8 times since March 2022 to curb inflation, and the bank has become forced to pay larger amounts to depositors in return for low returns from its investments. And as soon as the signs of the crisis appeared, the depositors rushed to withdraw their deposits in one day from the bank.
As for the professor of economics at the American College of Oakland, he saw that “the banking crisis is an extension of the financial crisis of 2008, and he studied financial management in the United States, stressing that what happened in the “Silicon Valley” bank is due to the policy pursued by former President Donald Trump, as he provided facilities Banks are outside the regulatory framework, but today the US Congress has begun to impose severe measures on banks.
He predicted that “the banking crisis will have repercussions on the global economy, especially if interest rates rise.”
In turn, the chief economist of the international financial group “EFG Bank” Stefan Gerlach confirmed in his interview with the program “Scenarios” of the banking crisis by central banks raising interest rates, and he believes that “the concern is due to the fact that things look good, and suddenly bankrupt institutions or banks appear “.
He said, “The Swiss authorities and the Swiss National Bank were able to control the banking crisis at the present time and the situation is stable, and we must wait and see how things will develop. He expects the next two months to be anxious.”
The President of the European Central Bank, Christine Lagarde, said that “the recent tensions surrounding the banking sector pose” new risks “to the European economy.”
