BANKING AND FINANCIAL MARKETS

Banking And Financial Markets In Qatar

Banking And Financial Markets In Qatar

Introduction

In a financial services context, a system would comprise personnel at various levels, from management to operations, dealing with accounting, not to mention bank regulators and auditors. The safety technology would include internal control and monitoring systems of banks, capital adequacy and solvency requirements, deposit insurance and guarantees provided to depositors, external auditing and regulatory monitoring and supervision. The level of skill and expertise required and available in the risk monitoring and compliance function is crucial to an assessment of systemic risk. It may even be that the safety of some risks or transactions is 'beyond expertise'. In such circumstances, no foolproof system can be designed, let alone implemented. The payment system, through which transfers of money between banks and other financial institutions is undertaken is a crucial element, almost the lifeblood of the system. Hence this needs to be closely analysed when trying to define systemic risk. Financial and insurance activities have registered a rapid growth in Qatar (Zarqa 1983 pp.181).

Evidence and Analysis

Qatar is another hot spot of banking and finance affairs in the Middle East. There are four major banks in Qatar, namely, Qatar Bank (established in 1983), Qatar International Bank (established in 1991), Doha Bank (established in 2006) and Al Rayan Bank (established in 2006). Other financial institutions that include First Finance Company, Investment House, Al Jazeera Company and Financial Securities are delivering retail products and brokerage services in the country. Qatar Bank has decided to establish Investment Bank of Qatar with US$1 billion capitalization at Qatar Financial Centre (QFC) (Sharif 2006 pp.11). Al Safa Bank, a subsidiary of a conventional bank, plans to offer products in retail and corporate finance sectors in Qatar. Recently, Qatar International Insurance Company and Qatar International bank have established a joint entity Tasheelat Company which will specialize in meeting the financing needs of individuals and business enterprises in Qatar. Presently, the share of banking practice represents 30 per cent of the Qatari financial industry, and is expected to grow up to 50 per cent in the coming years.

In 1994, Qatar Insurance Company was established which has now become one of the leading insurance service providers in the country. First, Sukuk were issued in 2003 and at present they constitute 20-35 per cent of the total project financing in Qatar. Qatar Bank is the main sponsor of Mutual Funds in Qatar. Doha Securities Market is playing a key role in promoting capital and secondary markets in the country. The QFC is also performing an extremely imperative role in promoting finance at regional and international levels. Qatar is the smallest but richest region of the Arabian Gulf due to a mammoth inflow of oil-wealth in its economy over the recent years. The Qatari government is ambitious to take up infrastructure and development projects worth billions in the country. Financial institutions can play very effective role in economic growth and development of Qatar (Jaidah 2006 ...