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tim5400
07-13-2010, 07:52 AM
IMF urges financial overhaul in Middle East and Central Asia

The International Monetary Fund (IMF) on Monday called on the Middle East and Central Asia (MECA) to play an active role in repairing the international financial system, and to implement the reforms needed to render the region's financial systems more resilient.

"As the international community advances in designing the measures to tackle the imbalances and vulnerabilities of the global financial system, it is very important for the region's regulators to be heard in the ongoing international debate, as many of the measures will impact the way their financial markets will work in the future," said Jose Vi-als, Financial Counselor and Director of the Monetary and Capital Markets Department at the IMF, in a statement.

The IMF said that given their more limited exposure to international financial markets and focus on traditional lending and savings mobilization, MECA banks have been less affected by the crisis than their counterparts in advanced economies.

Nevertheless, the crisis revealed a number of vulnerabilities across the region, highlighting the need for further reforms and continued supervisory vigilance.

"The recent crisis has brought to light some old shortcomings in the region's financial sectors and regulatory framework," said Adnan Mazarei, Assistant Director at the IMF's Middle East and Central Asia Department.

The IMF urged regulators to take steps toward improving the quality of capital and protecting against oil-price shocks.

The IMF also called for a "more comprehensive legal framework for financial institutions" to be put in place across the region to help manage increasingly important cross-border financial trades.