This is a remarkable achievement in the face of global and regional uncertainties, political and economic crises, wars and conflicts and the volatilities of the oil and currency markets. SAMA's focus on achieving and maintaining financial stability is premised on the belief that it is a fundamental precondition for sustained and dynamic economic growth in which all market participants are able to make optimum contribution to the economy. Financial stability not only promotes efficient domestic investment activity but also creates a positive environment to attract foreign capital and foreign investors. Dear Audience, Over the past decade, the Saudi Arabia's financial system has been changing at an escalating pace. The banking sector, being one of the pillars of the financial system, has 20 licensed banks including 16 that are operational and 4 that are planning to become operational over the next year. The newly licensed banks include 6 regional and 3 major international banks. As for the Insurance Industry, SAMA has recently been involved in licensing of 14 Insurance companies that are now in the process of becoming operational within this year. SAMA also continues to regulate a number of money-changer organizations as well as a few lease finance and consumer finance companies. The financial sector also includes several autonomous government financing agencies as well as the state-owned pension fund and the General Organization for Social Insurance.
§  Progress in these areas, even if only incremental, will have important implications for what is possible and necessary in the future. For example, having stronger bank and corporate balance sheets, with lower leverage, expands the scope for using interest rates and asset price adjustments as stabilizing devices. Better liquidity management at both the micro and macro levels - - longer maturities, and greater reserve coverage and back-up financing - - will create margins to ride out financial shocks. And more  5  effective insolvency regimes would make decentralized workouts more feasible, particularly in cases where systemic stress is better contained. •  The approach to crisis management and resolution also needs to be creative. In part, this can be accomplished by relying as much as possible on the efforts of debtors and private creditors to work things out on their own. The perception in some circles that private creditors are not interested in resolving payment problems expeditiously is mistaken, and stands at odds with recent experience. If nothing else, investors are interested in restoring liquidity to debt instruments in order to move on to new opportunities. There is also scope for exploring creative market-based ways to lever in private participation and stretch the impact of public sector funds. G  •  The various experiences since the late 80s with buybacks, partial guarantees, and debt exchanges provide some hints for how targeted deployment of public moneys can spur tendencies in a direction consistent with public policy goals.