Financial tempest spreads to the Gulf states
The global economic crisis extended its reach into the Gulf states Sunday, as Kuwait suspended trading in shares of a major bank and the Saudi authorities announced a plan to help citizens receive credit.
The Central Bank of Kuwait halted trading in Gulf Bank, one of the country’s largest lenders, after a customer defaulted on a derivatives contract. The central bank said it would “strongly support the bank’s financial position” and protect depositors, to assure the public that Gulf Bank’s business “will not be affected.”
The central bank also said it was moving toward guaranteeing deposits at local banks. Many other countries have already taken that step, putting lenders in countries with no guarantee at a disadvantage.
In Saudi Arabia, always sensitive to potential unrest, King Abdullah said that 10 billion riyals, or $2.7 billion, would be placed in an account in the Saudi Bank of Credit & Saving to enable the bank to help hundreds of thousands of citizens get loans for family needs including marriages and home repairs.
Middle Eastern governments…………………….
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