The GCC Single Currency: Institutional requirements and adoption of common monetary instruments

• Developing a common independent Central Bank: ensuring that monetary policy operations have a similar effect throughout the GCC area;
• Drawbacks of decentralized decision making in the context of a monetary union
• Role of National Central Banks: putting in place the necessary regulatory, legal, and institutional framework for monetary union
• Learning from the EU experience; tackling differences in tax, accounting, and legal frameworks, and a lack of fully integrated clearing and settlement systems.
  

Tackling policy differences within the GCC : implementing co-ordination tools:

• Common policies to deal with USD decline and USD peg?
• Policy differences among Gulf nations: meeting obstacles
• Identifying policy co-ordination tools
• How important is the transparency policy and need for statistical requirements?
• Harmonizing the legislative, regulatory, and supervisory frameworks
  

Structural Reform: GCC wide implementation

• Speeding the  region’s financial & capital markets integration: addressing key areas- entry restrictions, liquidity requirements, loan classification, provisioning and ownership
• Why are the Private securities markets not yet developed?
• What are the barriers still hindering the development of government bond markets?
• How liberalized are the region's banking systems? Increasing
• Cross-border banking operations
• Implementing reforms that strengthen product-market competition
• Khaleeji Dinar: Islamically acceptable currency against the dollar?
• Diversification- what is the incentive to remain linked?
  

Determining the common exchange rate policy: Regional perspective

• Determining the pooling of each GCC member's foreign reserves
• Deciding the rate at which to irrevocably fix the bilateral rates
• Adoption of a common definition: based on international standards of foreign reserves
• Providing an inflation-proof currency
• Common fixed exchange rate against the dollar
• Mortgage, Investment Banks, worst affected?
• Pegged exchange rate regime: how successful?
  

Commodities that impact on the single currency

• Production vs. inflation – the USD is the victim – understanding the relationship and the impact on the market
• Gold – will the banks buy or sell in an unstable market
• Budgetary policy in oil-dependent economies: ensuring an appropriate balance between present spending and saving for future
• Should targets be established for member countries' non-oil fiscal deficits & to determine underlying fiscal trend? (different hydrocarbon and financial wealth)
  

Assessing impact on: inflation, national budgets, GCC solidarity, International relations

• Different inflation policies within GCC
• Controlling inflation
• Key convergence factors: budget deficits, public deb
• Determining the common exchange rate policy, including pooling of foreign reserves, and the irrevocable fixing of bilateral conversion rates
• How important is the unification and development of the region's bond and equity markets?
• Implementing similar structure of the banking system across GCC countries
  

Building consensus: Would Gulf economies continue to prosper with or without monetary union?

• GCC Common currency disadvantages vs advantages
• Equal economic rights within the GCC
• Would lack of consensus lead countries to move independently to a currency basket?
• If we left the peg what next: revalue and re-peg?
• Spreading the risk: Opting for a basket approach. Is this without risk and would we be jumping from the frying pan into the fire?
• Risk management tools to control dollar decline
  

Introduction of the GCC common market – Impact on GCC

• Impact on: Inter-GCC trade, foreign direct investment service industries
• Is the common GCC currency integral to the success of the GCC Common market?
• What are the drawbacks of a common market?
  

GCC Common Currency: Managing the Transition period

• Addressing labor market rigidities and strengthening product-market competition
• Sustained Compliance with the chosen fiscal convergence
• A coordinated fiscal policy response to the shocks. This might also be needed to avoid endangering the cohesion of the union
  

Enhancing positive effects of a common monetary union:

• To increase job opportunities for nationals in the private sector
• Improving education and training to match available jobs with skill requirements and make the labor market for nationals more flexible