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UAE banks safe from global crisis: Central Bank

Abu Dhabi: The UAE banks won’t be adversely impacted by the turmoil roiling international markets, the country’s central bank said yesterday.

“The Board reviewed report of the Assistant Governor for Monetary Policy and Financial Stability Affairs, which showed that banks are in a good position and should not be negatively impacted by the recent turmoil in international markets,” the apex bank said in a statement.

Global financial markets have seen heavy selling pressure since the beginning of May as fears of a possible sovereign debt default by Greece and its exit from the Eurozone increase. The exit of Greece would most certainly mean a run on the sovereign debts and bank deposits of other heavily indebted countries in the Eurozone such as Portugal, Ireland, Spain and Italy — a possibility the European Central Bank (ECB) or Eurozone policymakers have not been able to conclusively put to rest until now.

Furthermore, the market confidence is bearish due to slowing economies in Europe, the US and China giving rise to the possibility of yet another global recession amid large scale unemployment and high oil prices.
Analysts say the global markets are set to fall further until there’s greater clarity on the Greek situation, which is going to the polls on June 17 to elect a new government. A decision by the ECB and the US Federal Reserve to pump more liquidity into the financial system would also help lift the sagging investor confidence, they add.

Board reviewed latest developments in the execution of the Falcon Project (restructuring of the Central Bank) and directed that execution phase be speeded up.
The Board reviewed a report submitted by Assistant Governor for Banking Supervision regarding the banking indicators.

The Board reviewed report of the Assistant Governor for Monetary Policy and Financial Stability Affairs, which showed that banks are in a good position and should not be negatively impacted by the recent turmoil in international markets.

The Board discussed some organisational matters relating to the Central Bank and addressed the remaining items on its agenda and took decisions.

By Himendra Mohan Kumar, Jun 02 2012

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