SAMA: Saudi Banks will have priority in repayment from Saad & Gosaibi (Re-post)

It is said that Saudi Arabian Monetary Agency (SAMA) has decided to discriminate in the resolution of Saad Group and Gosaibi saga. This is especially disappointing since Saudi Arabia is leading the way on the unified currency front, while acting selfish when it comes to conflict resolution. Reports suggest that SAMA will require the two groups to FIRST repay Saudi creditors then pay the rest. Considering the significant Emarati exposure, this has added to the already escalated tension between Saudi Arabia and the UAE. Recall that the UAE withdrew from the Gulf Monetary Union after the selection of Riyadh as the host of the Gulf Central Bank (GCB) (Press here for more details)

Moreover, this agreement is said to limit bank losses to 20-50% of PAR as the Saad and Gosaibi have some liquid assets that would be sold to cover part of their debt. SAMA expressed that they will NOT allow the bankruptcy of any Saudi bank. “The Saudis will do anything to prevent any damage that might harm the reputation of their banking system” Phillip Doba, Standard Charted.