Controversial rules designed to monitor and control borrowing by private and public-sector companies are being finalized by Egypt's ministry of economy. Senior government officials say the measures will prevent the economy from becoming vulnerable to an Asia-style collapse. If they aren't blocked by another government department, the new regulations, the Sphinx Protocol, should be published in coming weeks. The ministry of economy's plan would create a database of all current and potential bond issuers. Advance details of issues would be required, including the volume, maturity, coupon, currency and market of issuance. The reporting system will also be used to control the quality and quantity of borrowings.
Underwriters on the international market must have what Mahmoud Mohieldin, senior adviser to the ministry, describes as "a credible rating" from at least one of the international agencies.
"This is a long-term measure," says Mohieldin. "It will ensure that we have information about what is happening. The borrowing criteria will ensure that only the best companies borrow money and that not too many do so in one year."
But the protocol will not be backed up by statutory powers. Mohieldin says this is unnecessary as "one of the most important characteristics of the leading investment banks is that they do not want to upset the authorities.