The Union of Arab Banks (UAB) has announced plans to launch a project to reform the Syrian banking sector in collaboration with European entities, according to the union's secretary-general, Wissam Fattouh while highlighting serious plans for its implementation.
In a recent statement to the Saudi newspaper Al-Eqtisadiah, Fattouh explained that the project is being developed in coordination with the Central Bank of Syria, with ongoing discussions on implementation mechanisms.
He pointed out that the challenges facing the new government in Syria stem from the "heavy economic legacy" left by the ousted regime, necessitating fundamental financial sector reforms.
The three-year project will include developing banking infrastructure, as well as training and capacity-building programs in cooperation with the German Central Bank.
The initiative also involves the establishment of specialized asset management companies to handle distressed debts, a model previously adopted by countries such as the United States and Malaysia, according to Fattouh.
Fattouh suggested allocating part of the non-performing loans to these companies to mitigate the impact of the financial crisis. He also emphasized that the Syrian banking sector needs to strengthen its capital base to address financial risks.
He mentioned a gradual approach to privatizing public banks among the proposed solutions to enhance efficiency and boost investor confidence.
He also stressed the importance of improving internal compliance mechanisms and expanding financial inclusion through digital banking technologies. He noted that Syria faces challenges in combating money laundering and terrorism financing, particularly amid ongoing international sanctions.
Notably, the Union of Arab Banks is committed to fostering cooperation among Arab banks, advancing financial development in the region, and enhancing their role on the international stage.
