Wednesday, Oct 05, 2011
(This story was originally published Tuesday.)
--UAE central bank says local lenders in good position
--Doesn't see local banks affected by global economic turmoil
DUBAI (Zawya Dow Jones)--The United Arab Emirates central bank said Tuesday the country's lenders are in a good position and unlikely to be affected by the latest global economic turmoil, sparked by ongoing fears over euro-zone debt issues and slowing international growth.
"Banks are in a good position and should not be negatively impacted by the recent turmoil in international markets," the central bank's board of directors said in an emailed statement.
Global markets remain under pressure amid investor fears that European Union officials might fail to find a solution to the escalating euro-zone debt crisis, while the U.S. is yet to come up with a way to boost its ailing economy.
U.A.E. Economy Minister Sultan Al Mansouri said last month that he was optimistic about his country's banks and liquidity in the oil-rich Gulf Arab state.
The U.A.E. central bank has, since late 2009, required banks to keep tier I capital of at least 8% and tier II capital of 4%. The capital adequacy of banks has become a prominent issue after the Basel Committee on Banking Supervision, a body of central bankers and regulators from around the world, said banks will need to hold common equity to the value of 4.5% of their assets by the start of 2015, up from the current 2%.
On top of that, banks will need to hold, by 2019, a 2.5% capital conservation buffer of common equity that can be run down during periods of financial stress.
-By Leila Hatoum, Dow Jones Newswires; +971-4-446-1686; leila.hatoum@dowjones.com
Copyright (c) 2011 Dow Jones & Co.
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05-10-11 0403GMT
