Al Baraka Banking Group plans to apply a new mechanism designed to measure the direct impact of financing provided by its banks on the communities they serve, the bank's top official has said.

Al Baraka Banking Group president and chief executive Adnan Ahmed Yousif said by analysing the mechanics of financing applications, the mechanism would use assess impact on macroeconomic axes, including the number of jobs that can be created, improving the quality of life, and other topics that has direct impact on the community, reported the Gulf Daily News (GDN), our sister publication.

Yousif has also stressed the importance of taking into account the size of the banks to be fit with the economy so that they have the ability to meet the financing needs of economic sectors, according to their natural sizes, and thus have the ability to contribute to the achievement of macroeconomic objectives.

He also called for the need to adopt control and supervision systems that are taking into account the social dimensions and the nature and size of the local economies compared to developed economies.

The statement by Yousif follows a lecture organised by the bank titled "Structural challenges of the reforms in the financial sector," presented by US Federal Reserve board of governors assistant director of division of banking supervision and regulation Sarkis Yoghourtdjian.

Yoghourtdjian has praised the initiative by the bank, which connects the social responsibility directly to the business model, and is thus considered a unique and distinct initiative.

He hoped that governments will benefit from these information so they can accurately identify the size of the jobs that are created in the economy, not to mention all other economic benefits.

During the lecture, the expert discussed the control and supervision system structure which is currently applied on the international level in the period after the global financial crisis.

He also touched on some of the laws and regulations applicable in the US and their relationship with the strategy of dealing with classified institutions under the title "too big to be allowed to collapse or fall".

Yoghourtdjian also spoke about the overall structure of the control and supervision international system and most recently the Basel III system.

He submitted a proposal of eight points that he sees them as a safe umbrella for the banking system.

He also called on the supervisory and regulatory authorities to adopt a regulatory and supervisory system based on local cultural and social requirements.

The expert has also advocated a return to the simple work model of modern banking as represented by financial intermediation and away from the complex business models. - TradeArabia News Service