Regional financial integration

The importance of regional and global financial integration lies in adopting openness and economic liberalization policies by many countries since late 80s, lifting restrictions and easing control over the capital flows by reducing costs and raising allocation efficiency, diversifying financial instruments to accumulate savings and increase investment, modernizing trading systems and simplifying diversification portfolios and settlement procedures, access to finance, especially for MSMEs, and strengthening the real economy by enabling investment and job creation. Regional financial integration boots inclusive and sustainable economic growth locally and regionally through financial linkages that are expected to positively reflect on intra-regional investment.

The Arab region is still far from achieving its financial integration, compared to some other regions in the world, despite the financial liberalization policies and the economic and financial reforms undertaken by many Arab countries. In this context, financial integration must be a strategic goal for the Arab region, in line with the economic and financial transformations that have crystallized considering the growing pace of globalization because of technological progress, especially in the field of communications and informatics.

As part of its keenness to create the appropriate infrastructure and environment that serve financial integration, the Arab Monetary Fund has launched this initiative to work on several topics that aim to enhance opportunities for financial integration in the Arab region, including development of the services of “Buna” payment platform, follow-up to the Arab Digital Dinar project, regional mechanism that enhances the access of MSMEs to finance, regional system for clearing and settlement of securities transactions, mechanism for exchanging credit information, mechanism for exchanging information on cyber threats, compiling financial and banking legislation, launching a regional fund to support innovation in financial technologies, and unified database to enhance regional financial inclusion.