Amid the “tremendous uncertainty” caused by falling oil prices among investors, banks in Qatar should continue to create opportunities to generate profit, a Harvard professor has said.
Stuart C Gilson, Steven R Fenster Professor of Business Administration at Harvard Business School, said the world is experiencing a challenge to investor confidence due to falling commodity prices at a global scale.
“We are living in a state of great uncertainty…the price of oil falling at an unprecedented rate and great uncertainty about what is going to happen to the future price of oil has created an enormous impact on economies around the world,” Gilson told reporters yesterday at the Sharq Village and Spa Resort.
Gilson will be speaking to the participants of a six-day executive education programme for banking and finance executives in the GCC region spearheaded by the Institute of Banking Studies (IBS) – Kuwait and Harvard Business School.
“We have mixed signals and an unprecedented period of uncertainty right now, and much of what we need to do is to wait and see how this would play out. It is difficult to predict what would happen to the price of oil,” Gilson stressed.
Asked what banks in Qatar should do during this “period of uncertainty,” Gilson said banks should “look for opportunities to raise money and invest it properly.”
“And sometimes the opportunities are easier to identify than other times but the financial and banking sector are always the same – the goal is to create value and generate profit in a manner that provides benefits to the people who use bank services and obtain money from the banks,” he told Gulf Times. We have to be wary and to be aware of the heightened risks that occur at some points, but the fundamental goals remain unchanged and that is important. The goal is to avoid overreaction and a reckless way to a crisis.”
IBS –Kuwait director general Professor Yaqoub SY Alrefaei said IBS has worked with Harvard Business School for the seventh year to provide training programmes for banking and finance executives.
Gilson said executive education programmes play a significant role in helping the banking and finance sector in Qatar and the GCC region address economic issues affecting the industry such as the global oil crisis.
He said the topics and curriculum in the programme “are spot-on in terms of addressing the current challenges that certainly an oil-based economy faces.”
“The shockwave sent to this part of the world by plunging oil prices has put all kinds of organisations under increasing economic pressure, which is why it is important that companies in this region and elsewhere in the world have an effective response for preserving the business, looking for new opportunities to create value, and for dealing with the pressures that are placed on revenues, costs, and profit,” Gilson said.