GCC distressed debt market needed to clear problem loans, say experts | ZAWYA MENA Edition

GCC distressed debt market needed to clear problem loans, say experts | ZAWYA MENA Edition:

The development of securitisation laws to allow for banks to package and trade distressed debts is one of a number of capital market reforms that could help to improve both the credit position of banks and the ability of Gulf governments to withstand economic shocks, a leading regional economist has said.

Nasser Saidi, a former economy and industry minister of Lebanon and an ex-first vice-governor of Lebanon’s central bank, told the Corporate Restructuring Summit in Dubai on Wednesday that although bankruptcy laws have been introduced in a number of countries, including Saudi Arabia, the United Arab Emirates and Bahrain, "we are right at the beginning" in terms of developing a legal framework to aid restructuring.

"It also requires securitisation laws," said Saidi, who has also previously advised as chief economist to the Dubai International Financial Centre, but who now runs his own consultancy firm, Nasser Saidi & Associates. "If you develop securitisation laws, that allows you to develop a CLO (collateralised loan obligations) market and CDO (collateralised debt obligations) market. We also need that.