TheBusinessWeekly n 29 June 2008 n 21

banking&finance

Central Bank to be lead regulator on RAPID
DIFC to financial institutions operating within the centre and throughout the wider region. Sultan Bin Nasser Al-Suwaidi, governor of the CBUAE, said, “As a pioneering system that will greatly benefit those doing business, RAPID looks set to revolutionise payment methods at the region’s leading financial centre. The CBUAE is committed to ensuring the reliability and integrity of all financial products and services available within the region and it is with great pleasure that we enter into this strategic alliance to actively ensure that RAPID complies with all of the regulations placed upon it.” centre and a hub for finance in the region, the DIFC recognises its responsibility to provide the latest, most innovative products and services to drive the growth of the banking and finance industry. We are delighted that the CBUAE will govern the payment systems implemented by RAPID and we look forward to the positive impact that RAPID will have on business in the DIFC and the region.” As part of the agreement, the CBUAE becomes the lead regulator for the payment systems implemented at RAPID and has ultimate responsibility to ensure that RAPID complies with the Core Principles for Systemically Important Payment Systems (CPSIPS) as issued by the bank for International Settlements (BIS). As the lead regulator of RAPID, the CBUAE’s overall responsibility is to ensure that RAPID’s payment systems and the regulatory regime for RAPID comply with CPSIPS. This will be undertaken by an initial and periodic assessment of RAPID against the

Sultan Bin Nasser Al Suwaidi

Omar Bin Sulaiman

Enters into agreement with DIFC
TBW Bureau
The Dubai International Financial Centre (DIFC) has signed a Memorandum of Understanding (MoU) with the Central Bank of the UAE (CBUAE) under which the latter becomes the lead regulator for Real-time Automated Payments in DIFC (RAPID). RAPID is a DIFC initiative to provide a real-time gross settlement (RTGS) payment systems infrastructure from within the

World-class infrastucture
Dr Omar Bin Sulaiman, governor of the DIFC, said, “By establishing RAPID, the DIFC is once again reaffirming its commitment to providing a comprehensive world-class financial infrastructure to encourage the development of the financial sector in the Middle East. As the world’s fastest growing financial

CPSIPS criteria and other international best practices. DIFC will undertake all steps to establish and maintain RAPID legally and commercially. The DIFC will have the responsibility for establishing and maintaining appropriate governance powers and structures in compliance with CPSIPS and other best practices, so as to ensure that the RAPID has sufficient independence and clarity in its role and structure to conform with CPSIPS and other international best practices. The CBUAE will also undertake a series of other regulatory steps as appear reasonable and necessary to regulate RAPID.

Financial services benefit from credit crunch
Assets easier to buy, human capital grows
Jim Paolo Joquico
The Middle East’s financial services sector has stood to benefit from the current economic crisis in the West, a top company official of a global financial consulting firm said. He mentioned that instead of being affected negatively by the credit crunch with some of the Gulf Co-operation Council (GCC) countries’ currencies pegged to the US dollar, the crisis has brought with it some positive effects. Speaking to The Business Weekly, Julien Faye, partner for Financial Service and Private Equity at Bain & Company Middle East, a US-headquartered, market-leading global business consulting firm serving clients between US investors and local investors, creating liquidity and access to more cash.”

Trigger for expansion
Apart from the emergence of new opportunities for investors, Faye pointed out that the crisis has initiated a good occasion for international expansion of companies. “There is a major window of investment opportunities for clients from the GCC and Egypt to invest and to grow. Now is the moment to think about expanding internationally, from being a local business to becoming a regional or global commercial institution. It is now easier to buy assets and companies because of the US credit crunch,” he added. Economies in the Middle East will also witness a positive effect in terms of developing human capital in the region, with the economic recession causing the

Julien Faye

on issues of strategy, operations, organisation and mergers and acquisitions, said, “First of all, growth has not been impacted, both for our clients and for our own business operations. Also, there is a lot of investment opportunities that didn’t exist three or four years ago for our clients, basically, because of an imbalance

influx of highly-qualified professional talent to the Middle East. “More and more talented people want to come to the region because there are less decent job opportunities available in the West, mainly in the UK and the US. The region proves to be very attractive to these professionals, and this is a good thing for all business sectors and economies here. In financial services, especially, we have a lot of highlyqualified people coming in,” Faye said. However, Faye warned that the crunch may affect the region in the future. “The only danger that we see is inflation, which is linked to the situation of the dollar. That could be an issue in the coming years, but at the moment, it is not,” he said. Bain & Company has been serving clients in the Middle East since the early 1990s.