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Central bank safeguards during crises
The article discusses how the Central Bank of Egypt protects depositors' funds during times of crisis by implementing legal measures that allow for rapid intervention to ensure the stability of the banking system. The law specifies that the Central Bank has 12 tools to control the market, including managing monetary policy, regulating the foreign exchange market, establishing risk management policies, and settling the affairs of distressed banks. The law distinguishes between two types of intervention in cases of liquidity shortages or insolvency: emergency financing is permitted for banks with good financial standing for a period not exceeding one year, under strict conditions to ensure transparency and integrity. These include prohibitions against conflicts of interest and preventing staff from participating in the management of the supported institutions except in specific cases. The goal of these measures is to avoid collapse scenarios, protect depositors' funds, and maintain the stability of the financial system.
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