|Gulf Times - Call for legal reform to
deal with crunch
|By Peter Townson
Qatar’s Minister of Economy and Finance, HE Yousef Hussein Kamal,
addressed participants at the Qatar Law Forum yesterday claiming that legal restrictions imposed on governments
and financial institutions had meant that the response to the current global financial crisis was not as quick
as it might have been.
Speaking at the session entitled “In a Time of Financial Stress: Regulatory Law
and the Credit Crunch”, Kamal explained that although Qatar had not been affected too badly by the crisis, and
was still experiencing growth of 7-9%, legal limitations had prevented people within the financial sector from
acting immediately, and argued that the legal framework surrounding international finance needed to be changed
to help facilitate a faster response.
“People must realise that this kind of economic crisis can
happen and create a legal framework to deal with it,” he argued, adding that the fact that laws can be changed
or overruled on a whim when concerned with issues of national security is something that should also be
extended to financial matters.
“We do not receive the same level of flexibility and freedom,” he
argued before calling for reform.
The minister said that countries could not simply act independently,
but must think and work together.
He compared the Qatari economy to a “boutique” clothes shop,
which allows the government to control what happens throughout the country as opposed to a “department store”
which is too big to maintain efficiently.
But the overriding message of Kamal’s address was that there
is a necessity for international co-operation as well as domestic legislation to provide help to avoid future
This sentiment was echoed by the other members of the panel during the discussion,
who put forward suggestions as to how an international legal framework might be created.
general counsel of the International Monetary Fund Ross Leckow backed the minister’s claims that a strong legal
framework was necessary to encourage international development.
He argued that any framework must not
be binding, as any mandatory agreement would be weaker than a voluntary one. He added that the amount of money
available for the IMF to assist national economies had recently been tripled to some $750bn.
former deputy governor of the Bank of England, Sir John Gieve, claimed that unemployment would continue to
increase for the next two years, and argued that banks needed to take “big measures to reduce moral hazards” in
In terms of international co-operation, Gieve claimed that governments needed to establish
a set of common global rules.