Tunisian Central Bank Governor Calls for a New Era of Arab Financial Cooperation

Fethi Zouhair Nouri, Governor of the Central Bank of Tunisia (BCT), has urged for a significant scaling up of Arab financial cooperation. In the face of overlapping crises, he proposes a strategic shift from reactive measures to common mechanisms for prevention, risk-sharing, and rapid liquidity mobilization.

Speaking at the 50th Annual Meeting of the Council of Arab Central Bank and Monetary Institution Governors, the Governor emphasized that nearly five decades of cooperation provide a solid foundation for building new frameworks. He noted a sharp increase in shocks of varying natures, pointing out that geopolitical risks, energy and food security, financial markets, climate change, and cybersecurity can now transmit simultaneously to economies. “We sleep through crises and wake up to shocks,” he summarized.

Five Proposed Mechanisms

To enhance collective reaction capacity, Fethi Zouhair Nouri outlined five proposals, the progress of which could be evaluated at the next meeting:

1. Common Arab Stress Test: This initiative would assess the ability of economies to absorb multiple scenarios, including disruptions to trade corridors, spikes in energy and food prices, and reduced access to international financing.
2. Arab Network of Swap and Repo Lines: A new mechanism designed to provide liquidity during periods of tension. This system would be coordinated with the Arab Monetary Fund and based on pre-defined conditions.
3. Arab Early Warning Observatory: A body tasked with monitoring risks related to energy, food, maritime transport, insurance, and capital flows, facilitating rapid information exchange between countries.
4. Enhanced Use of Buna: A push to increase the effective commercial use of Buna, the regional Arab payment system, through measurable targets and better utilization of existing infrastructure.
5. Common Payment System Protection Framework: The establishment of a shared framework for protecting payment systems, accompanied by an annual regional exercise to test institutions’ ability to withstand cyberattacks and operational incidents.

Anticipating Crises Rather Than Managing Emergencies

For the BCT, implementing such mechanisms requires building safety margins during periods of stability and preparing intervention instruments before crises emerge. This approach also implies an evolution in the role of central banks. Financial stability would no longer be defined merely by the absence of crisis, but by the capacity of economies to absorb shocks while maintaining fundamental balances and the continuity of banking services and payment systems.

Governor Nouri stressed the importance of managing expectations, securing and mobilizing reserves, crisis management planning, and communication and cooperation among central banks. He called on governors to strengthen their anticipatory capabilities regarding geopolitical, energy, and climate risks before they transmit to prices and markets.

According to him, this evolution must be accompanied by appropriate instruments and clearly defined responsibilities to preserve the credibility of central banks. The stated objective is now to transform the differences in financial capacities among Arab economies into a lever for collective protection, rather than a source of vulnerability in the face of shocks.