IMF Staff Country Reports

Saudi Arabia: Financial Sector Assessment Program-Financial System Stability Assessment

September 4, 2024

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Format: Chicago

International Monetary Fund. Monetary and Capital Markets Department "Saudi Arabia: Financial Sector Assessment Program-Financial System Stability Assessment", IMF Staff Country Reports 2024, 281 (2024), accessed December 3, 2024, https://doi.org/10.5089/9798400288074.002

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Summary

This paper highlights Saudi Arabia’s Financial System Stability Assessment as part of Financial Sector Assessment Program (FSAP). The FSAP took place against the backdrop of a robust economy driven by an ambitious state-led transformation agenda to accelerate Saudi Arabia’s economic diversification (Vision 2030). The Kingdom’s sovereign wealth fund plays a key role in implementing and funding the economic transformation. At present, financial sector risks from the rapid economic transformation appear contained. Banks are well-capitalized, profitable and appear resilient to severe macroeconomic shocks. Banks’ capacity to manage liquidity stress scenarios is generally good, although funding concentration is sizable. The authorities have made commendable efforts to mitigate risks from the rapidly growing credit and real estate market, but significant data gaps create challenges for systemic risk monitoring. The time is right to strengthen systemic risk monitoring and the legal, institutional, and operational frameworks in support of financial stability going forward.

Subject: Anti-money laundering and combating the financing of terrorism (AML/CFT), Commercial banks, Crime, Financial institutions, Financial regulation and supervision, Financial sector policy and analysis, Financial sector stability, Macroprudential policy

Keywords: Anti-money laundering and combating the financing of terrorism (AML/CFT), B. bank stress tests, Commercial banks, Coverage ratio, Financial sector stability, Global, Liquidation framework, Liquidity stress scenario, Macroprudential policy, Mission chief World Bank, World Bank FSAP team member

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