ID :
30036
Thu, 11/13/2008 - 15:32
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http://m.oananews.org//node/30036
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Central Bank task force set up
Abu Dhabi, Nov 13, 2008 (WAM) - The Central Bank has set up a task force that could help the country's financial industry deal with the global economic downturn, a person familiar with the initiative said according to a report in “Emirates Business.”
The task force, known as the Financial Stability Unit, will "keep an eye" on potential threats to the financial system in the Gulf's second-largest economy after Saudi Arabia, according to the person.
The central bank also issued a statement yesterday saying that its board is studying proposals with the Ministry of Finance to introduce "financial vehicles" to back up real estate loans. "The board discussed proposals for introducing financial vehicles for dealing with real estate loans, to ensure their continuity, in consultation with the Ministry of Finance," the bank said. "Real estate exposure is a potential problem as banks may not be able to weather the drop in value of real estate," the source said.
The task force is the latest in a series of measures by the UAE Government to restore confidence in the country's economy and banks. The Abu Dhabi-based central bank and Ministry of Finance have made available Dh120 billion to provide liquidity for lenders as well as guaranteeing deposits.
"It is to prevent the liquidity crisis from crystalizing further, the intention is to nip problems in bud," the person said. The setting up of the unit is also part of a broad strategic review at the central bank, the person said.
"What the central bank and ministry propose to do is to provide additional liquidity... easier loans, mortgages for individuals and institutions to purchase property," the official said. The bank's board yesterday also approved applications by banks to expand their businesses and open branches.
The task force, known as the Financial Stability Unit, will "keep an eye" on potential threats to the financial system in the Gulf's second-largest economy after Saudi Arabia, according to the person.
The central bank also issued a statement yesterday saying that its board is studying proposals with the Ministry of Finance to introduce "financial vehicles" to back up real estate loans. "The board discussed proposals for introducing financial vehicles for dealing with real estate loans, to ensure their continuity, in consultation with the Ministry of Finance," the bank said. "Real estate exposure is a potential problem as banks may not be able to weather the drop in value of real estate," the source said.
The task force is the latest in a series of measures by the UAE Government to restore confidence in the country's economy and banks. The Abu Dhabi-based central bank and Ministry of Finance have made available Dh120 billion to provide liquidity for lenders as well as guaranteeing deposits.
"It is to prevent the liquidity crisis from crystalizing further, the intention is to nip problems in bud," the person said. The setting up of the unit is also part of a broad strategic review at the central bank, the person said.
"What the central bank and ministry propose to do is to provide additional liquidity... easier loans, mortgages for individuals and institutions to purchase property," the official said. The bank's board yesterday also approved applications by banks to expand their businesses and open branches.
