Interpreting Middle East Economic News and Analyzing Market Trends

Category: Banks

Kuwait approves debt relief for a select few

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The parliamentary debate, which has been going on for months, finally came to an end yesterday with a vote of 50 in favor and 4 against.  The bill calls for the government to buy personal loans of some citizens, write-off interest and reschedule payments.  The total expected cost is $2.6 billion.

 

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Arab governments to inject billions into regional development banks

Arab governments realizing the need to step up investment efforts in the Middle East after the Arab Spring are pledging to inject new capital into the five main development banks in the region.  They are;

 

1.  Arab Fund for Economic and Social Development

2.  Arab Monetary Fund

3.  Arab Bank for Economic Development in Africa

4.  Arab Authority for Agricultural Investments and Development

5.  Arab Investment and Export Credit Guarantee Corporation

 

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Dubai Group’s investment in Cypriot bank goes from €1.4 billion to zero in record time

There were not many winners in Cypriot banks recently, certainly not Dubai Group.  The death of the financial system in Cyprus was cheered by EU leaders who fought hard to have Cyprus close loopholes for wealthy Russians.  Many of the seized uninsured bank accounts were thought to be Russian own, but later word got out that a lot of Russians took their money out before the bank closures in Cyprus or during the closures via the banks’ international branches.

 

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… Meanwhile, Saudi banks suffer from too much cash

It’s a terrible time to be a bank in the Eurozone.  Countries in southern Europe are stuck in a depression, banks all over Europe are stuck with too much bad debt, and recently a major loss of confidence after the public theft of Cypriot depositors.  Banks in Saudi Arabia, on the other hand, face a different challenge: what to do with all that cash?

 

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The Cypriot euro launched today

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Heavily-guarded trucks loaded with euros headed to the Central Bank of Cyprus

Banks in Cyprus will open today at noon for the first time in nearly two weeks.  The terms of the bail-in by the Trioka were only finalized on Monday, which called for a ‘levy’ on uninsured deposit (deposits over €100,000) of up to 40%.  Banks remained closed in the meantime until further clarification and to give the government time to put in place capital controls, in effect creating a new currency, the Cypriot euro.  Here’s more from The Wall Street Journal:

 

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