UAE systems stronger than G7
The UAE banking and financial systems are stronger than most of the advanced countries including all of G7 and most of OECD countries, according to a World Economic Forum (WEF) study.
The UAE has been ranked fourth and sixth worldwide in terms of stability of banking and financial systems, respectively, higher than Canada, US, Britain, Germany, Australia, Japan, Norway, France and others.
“Its 6th-place ranking in financial stability is driven by the stability of its banking system, offsetting its weaker scores for the risk of sovereign debt crisis,” said the WEF’s Financial Development Index 2010 released today.
Saudi Arabia topped the global financial stability ranking, followed by Hong Kong, Malaysia, Singapore and Switzerland.
Despite a drop of one notch in global position to 21st place, the UAE scored the highest in the Middle East and North Africa region in foreign direct investment (FDI). In the overall index, Bahrain ranked 23rd, followed by Saudi Arabia (26th) and Kuwait (28th) among world’s 57 countries.
Among banking financial services sub-index, the UAE was ranked 20th worldwide and faring better than many developed countries including the US, France, Italy, South Korea, Saudi Arabia, Kuwait, Brazil and others.
The country didn’t fare well in non-banking financial services and financial markets sub-indexes, ranked 28th worldwide but surpassed most of the developed countries in financial access sub-index.
The emirate also topped in business environment category in the Mena region and ranked 21st worldwide – above Saudi Arabia, Spain, Italy, Malaysia, Kuwait and others.
“The UAE’s institutional (23rd) and business environments (21st) are advantages, with solid scores across a number of measures such as legal and regulatory issues (20th), corporate governance (20th), and infrastructure (25th). The tax regime (6th) is also especially favourable, as it poses little administrative burden and has few distortive effects. The UAE has solid scores in most areas of financial intermediation, though financial disclosure appears to be a weak point (41st). Financial access is quite strong for both corporate (10th) and retail (12th) end-users,’ the WEF report said.