Thanks to these efforts, the institutions and the system have remained stable and steady, despite global economic crises and oil price volatilities. Dear Audience, We should not rest on these past successes. We must remain vigilant and continue to monitor changes in regional and global markets. We must continuously ensure adopting and implementing best international standards and principles. In this context, I wish to draw to your attention that SAMA is currently directing the banks in the Kingdom towards the adoption of Basle II Capital Adequacy standard by 1st January 2008. I expect all banks to easily meet the required capital requirements; and this will be positively reflected on fostering the risk management and corporate governance culture that is deemed essential for meeting the challenges of the forthcoming stage. In conclusion, I wish you a good stay in the Kingdom, and wish all success to your conference. Thank you for your attention. BIS Review 83/2007  3
The Federal Reserve responded by purchasing $ trillion in MBS and agency debt as part of QE1, the program of balancesheet expansion that ran from late 2008 through the spring of 2010. Holdings of MBS and agency debt were then allowed to run off and by September 2011 had fallen to a little under $ trillion. Holdings were stabilized at that level when proceeds from maturing agency securities and MBS began to be reinvested in MBS, starting October 2011. The renewed expansion of MBS holdings that began in October 2012 as part of QE3 was motivated less by any sense that the mortgage-finance market was dysfunctional than by the notion that normal frictions in that market potentially provided monetary policy with leverage to stimulate the housing sector – and thus the economy as a whole – at a time when moretraditional policy tools had been exhausted. The FOMC majority pushed aside concerns that providing targeted support to housing is more properly the province of fiscal policy, and voted to proceed. From the start of QE3 to its conclusion, the Fed’s portfolio of agency securities and MBS expanded by about $ billion. In the latest version of its normalization principles, released this September, the FOMC indicated that it expects to reduce its holdings in future years primarily through attrition. What of the expansion of the Federal Reserve’s holdings of longer-term Treasury securities under QE3? Fed purchases of longer-term Treasuries amount to nothing more than the transformation of long-term Treasury obligations into short-term obligations of the Federal Reserve.