WITH the global financial market changing and world economies continuing to face new pressures, a major conference in Qatar this December aims to understand how the growth of alarming credit levels is being controlled – and the role that GCC institutions will play in the future. Hosted by Qatar Central Bank and held under the patronage of Sheikh Hamad Bin Jassim Bin Jabr Al-Thani, Prime Minister and Minister of Foreign Affairs, the event will examine how credit has been used as a primary driver for public spending, lending and private consumption in recent years, and look at the efforts to manage the spiraling phenomenon. The event, “Global Finance: Re-Designed," to be held Dec. 11-12 in Doha is supported by Qatar National Bank, Commercial Bank of Qatar, International Bank of Qatar, Qatar Islamic Bank, and Qatar First Investment Bank. Richard Banks, Regional Director for Euromoney, organiser of the event, said: “Governments have reacted to the credit crisis by increasing regulation on banks, upping capital requirements and restricting banks ability to take on risk. Banks and markets have reacted to the government debt crisis and the regulatory changes by reducing lending across the board and by viewing sovereign debt as a credit product." “However, if governments and banks are bound by restrictive credit, what financial mechanism will provide the oil which lubricates the global economy and returns it to growth? This will be the subject of the first Euromoney conference in Doha," he added. One of the key areas for discussion at the conference is that the world of finance is becoming more, not less, complex as a result of the crisis. The pace of financial innovation – in both products and technology – is increasing. The number and type of companies involved in the business of finance will also increase. New credit players such as hedge funds, asset managers and specialist non-bank institutions will grow significantly. Regulatory complexity, Central Bank tools and government-led financial engineering will also grow. For sovereign wealth funds, governments and banks within the MENA region, the opportunities for playing an enhanced role will be significant, given the ongoing economic development and increased global profile of the region. At the heart of this lies a fascinating debate on behavioural financial models versus “the market", and the emerging discipline of “neuro-economics," which combines evolutionary biology, neurology and financial market behavior. “Finance is meant to be an enabler, a means to an end and not an end in itself. If the result of the current changes is a financial system which has a better series of results for savings and investments as its output, then the changes will be worth it. These outputs are measured primarily in the private sector – better return on our investments and more capital available to business," Banks said. – SG
