Stricter regulation and supervision of Saudi Arabia's banks' large loan exposures to big corporate groups are necessary despite decent overall capitalisation, the International Monetary Fund said late on Wednesday.
Lenders in the world's top oil exporter are able to withstand severe temporary shocks, with the aggregate solvency ratio remaining above 8 percent for most scenarios, the IMF said in a study.
"However, the system could be vulnerable to a prolonged and deep oil price decline, especially if it were accompanied by a slowdown in domestic economic activity," IMF staff said in the report.
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