Gulf Governments Don’t Want Bank Bailout Precedent

Gulf banks should bear responsibility for their lending practices and governments must not create a precedent with bail outs, Oman’s central bank governor said.

“Nobody should expect that governments are going to bail out the borrowers,” Hamud bin Sangur al-Zadjali told reporters at a news conference in Abu Dhabi today following a meeting of Gulf central bank governors that he chaired. “Banks need to take responsibility for their decisions.”

Saudi Arabia’s Saad and Algosaibi groups, which are restructuring their debt after defaulting on payments, have borrowed at least $15.7 billion from more than 80 regional and international banks, including Paris-based BNP Paribas SA, New York-based Citigroup Inc. and Arab Bank Plc in Amman, Jordan, according to documents provided by lenders.