Page 49 - Annual Report 2017

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MACROPRUDENTIAL ANALYSIS In 2017, significant geopolitical uncertainties materialised, with the Industry statistics and financial data
impact yet to crystallise in the global and regional economies. With
the added political complexities arising globally, existing risks have The Macroprudential Analysis department produced internal quar-
In 2017, under the Regulatory Authority’s risk-based supervision become more pronounced with important implications for finan- terly fact sheets with the intent of providing a macro view of the
framework, the Macroprudential Analysis department continued cial stability. The department produced three sequential reports Regulatory Authority’s authorised firms. The fact sheets are based
to provide key insights to microprudential supervisory staff, senior analysing in depth the impact of the regional blockade on Qatar’s on standardised, aggregated data and are intended to be self-ex-
management, and the Board of Directors. economy and specifically the financial sector. planatory through the use of tables and graphs. They highlighted
key facts, such as the size and scope of the different sectors.
In considering risks from a macroprudential perspective, the The department assessed the following risks to global financial sta-
department identified and assessed relevant financial stability risks bility as important to monitor significant trends and developments: The fact sheets included analyses and trends concerning the size
by monitoring developments and trends on the global, regional, • the implications of low growth of the global economy; and structure of the sectors, business activity by license type, geog-
and domestic fronts. The department supplemented the micro- raphy and corporate structure. They also included analyses and
supervision framework with routine horizontal or cross-firm reviews • the effect of unconventional monetary policy, due to an era trends of key balance sheet and off-balance sheet items, profit-
to monitor developments and trends of Regulatory Authority of low inflation and low interest rates; ability, foreign currency activity, and performance and risk ratios for
authorised firms (corporate banks, investment banks, investment • the influence of the slowing growth of the Chinese economy; the core risk areas (such as capital adequacy, credit risk, liquidity
managers, advisory firms, insurers, and insurance intermediaries). risk and market risk).
• the effect of the rapid growth of the shadow banking sector;
Research and analysis produced at the macro level have con-
• the results of large-scale cyberattacks; tinued to foster the position of the Regulatory Authority to carry
Monitoring and reporting
• the consequences of Brexit; out its functions effectively and to contribute proactively and con-
structively to the work of Qatar’s Financial Stability and Risk Control
The department prepared regular internal reports providing an • the impact of the withdrawal of correspondent banking rela- Committee (FSRCC), in close collaboration and partnership with
overview of key global macroeconomic, market, financial, political, tionships; and senior members of staff from the Qatar Central Bank and the Qatar
and regulatory developments, based on the following structure: • the influences of rising populism and anti-establishment Financial Markets Authority. During the year, the department held
• Global developments and trends in selected advanced and sentiment. meetings with several external stakeholders to identify and discuss
emerging market economies with interconnectedness to Qatar key risks to domestic financial stability and prepared biannual finan-
and/or the QFC; Two emerging risks, the macroeconomic and macroprudential cial stability indicators reports for the FSRCC.
consequences of which have not as yet fully materialised on a
• Regional developments and trends in the Middle East and
North Africa, with a focus on the Gulf Co-operation Council global scale, were also identified: A commitment to co-operation
(GCC) countries, excluding Qatar; • the impact of the implementation of IFRS 9 in 2018; and
The department also provided assistance and information to
• Domestic developments and trends in Qatar; and • the risks of artificial intelligence and machine learning.
different international organisations, including the International
• Regulatory Authority authorised firms’ developments and Monetary Fund and the World Bank. It also contributed to the draft-
trends. The department deemed the following risks to regional financial ing of the Financial Stability Report of the Qatar Central Bank, and
stability as the most significant in their potential to impact the GCC participated in meetings of the Economists Roundtable, collabo-
region, Qatar, and the Regulatory Authority authorised firms: rating with economists from different Qatar ministries.
• the impact of the blockade on Qatar;
• the regional geopolitical conflicts;

• the consequences of the persistence of low oil prices;
• the uncertainty surrounding the impact of key reforms by GCC
countries; and
• the withdrawal of correspondent banking relationships.