Abu Dhabi: The UAE's central bank should relax rules that govern how much banks may lend to help bring down the cost of borrowing, the chief executive of the country's second-biggest bank by assets said.
Business | Banking
NBAD official suggests UAE regulator should ease loan ratios
The regulator should ease the so-called loans-to-stable resources ratio, Michael Tomalin, CEO of the National Bank of Abu Dhabi said in an interview on Monday.
- Bloomberg
- Published: 00:00 April 7, 2010
The regulator should ease the so-called loans-to-stable resources ratio, Michael Tomalin, CEO of the National Bank of Abu Dhabi said in an interview on Monday.
The government could alternatively inject additional deposits into banks, as it did in October 2008, when it placed Dh 50 billion with the country's lenders, he said.
"We definitely do need to bring down borrowing costs, Tomalin said. "One way, of course, is to provide more liquidity to the system, another way is to change the loans-to-stable resources formula" used to regulate lending, he said.
Borrowing costs in the UAE have risen 22 per cent since January as banks struggled to attract deposits. The three-month Emirates interbank offered rate climbed to 2.3 per cent on March 22, its highest this year, from 1.88 per cent on January 5, according to data compiled by Bloomberg.
Governor says: There's enough liquidity
United Arab Emirates central bank Governor Sultan Bin Nasser Al Suwaidi said the country's banking system has enough liquidity to meet the economy's needs. "The situation of liquidity and deposits in the banking system is normal and compatible with the economy and its needs at the moment," Suwaidi said yesterday in an interview in the Sudanese capital Khartoum.
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