UAE banks have the strongest capital base in the Middle East and this will enable them to withstand a fresh crisis as they push ahead towards complete recovery from the 2008 distress, the Central Bank governor has said.
Sultan bin Nassir Al Suwaidi put the combined capital adequacy ratio of the UAE’s 51 banks at around 20 per cent, higher than all other banks in the region and far above the Basle 3 adequacy requirement for 2019.
Addressing a business leaders’ conference in Abu Dhabi on Monday, Suwaidi said a new global financial order is needed so the banking system can deal with a fresh crisis without the need for government intervention.
“The world today is in need for a new financial order capable of withstanding crises…in the UAE, banks now enjoy high efficiency in managing liquidity and have enough capital to absorb any new shock that could hit the local or global financial system,” he said in an address, read by Saif Al Shamsi, Executive Director of Treasury at the Central Bank.
“The economic events in the past period show that the global financial system is facing a real challenge and this should prompt nations to make progress towards devising a new order to avert fresh crises.”
Suwaidi said the 2008 global fiscal distress had been a result of many factors, mainly entering unnecessary high risk investments and the inability one country to face a crisis alone.