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Kuwait forms task force, moves to guarantee bank deposits

KUWAIT CITY - Kuwait's government on Sunday formed a task force to handle the impact of the global financial crisis and moved to guarantee bank deposits after the oil-rich emirate's second largest lender incurred losses from derivatives trading overseas.

The formation of the task force was decided during an emergency cabinet meeting to discuss the repercussions of the global financial turmoil on Kuwait's banking system, amid another major slump by the stock market.

‘The cabinet has assigned the governor of the central bank to lead a professional and specialised working team with executive powers to follow up and deal with the impact of the global financial crisis on Kuwait's economic and financial situations,’ a cabinet statement said.

The cabinet also said the government is committed to ‘guarantee all deposits in the national banks.’

Earlier, the central bank said the government will urgently submit a draft law to parliament to guarantee deposits in local banks.

The move came after the central bank announced that Gulf Bank, Kuwait's second largest lender, incurred ‘losses’ from trading in derivatives and immediately suspended its shares on the stock market.