Palestine Monetary Authority (PMA) issued its Financial Stability Report for the year 2013. Along with monetary stability mission, which concerns itself with the preservation of money value, financial stability in Palestine is on PMA’s top priorities. PMA is the sole authority in the country in charge of protecting the financial integrity of operating banks, payment service providers and the payment system. Interest in such areas reveal the due emphasis placed on strengthening the financial sector so that it can efficiently support economic growth and development. The sector is the backbone of the Palestinian financial system but is also the most vulnerable, which requires guarantees to be provided for a smooth flow of money between families, companies, the government, customers and the outside world.
In the introduction of the report, Governor of Palestine Monetary Authority, Dr. Jihad Al Wazir said the findings of the procedures adopted by PMA have had positive bearings on the good performance of the banking system in Palestine. It is clearly reflected by its financial indicators, including the improvement in assets, both in quantity and quality and an increase in the capacity of banks in facing up anticipated and unanticipated risks.
PMA is taking in earnest the risks facing and threatening to destabilise the financial system, Al Wazir said, conceding, yet to the good performance of the Palestinian banking system. He also said PMA identified a number of potential risks to financial stability, citing in particular the increasing vulnerability of the banking system and employees, proportional increase in consumer loans in credit facility portfolio, risks of relations with Israeli correspondent banks in addition to other risks that have to do with foreign employment and exchange rates in the Palestinian market. But PMA is watching closely those challenges and risks will take necessary measures to mitigate their effects, Al Wazir added.
The aim of this report is to raise awareness and understanding of those issues related to financial stability in Palestine. It covers PMA's assessment of the potential risks and challenges facing financial brokers and the financial system, hence understand to which extent the system can withstand the risks and threats. Other procedures and tools will be taken to improve performance, strengthen financial stability and do away with any potential risks or threats.
The 2013 Financial Stability Report prepared by the Monetary Research and Policies Department falls into seven chapters. It provides a brief on local and global economic developments in addition to an analytical account of main developments in the Palestinian financial sector and their potential impacts on Palestine's financial stability. The report also reviews PMA's efforts in preserving financial stability by providing for an infrastructure for the banking system, enhancing financial safety network, developing monitoring procedures and regulations that are compliant with international standards, dealing with weak banks, promoting customer confidence and introducing such other hedges as appropriate.
Check out the full report here.