By implementing preventive measures such as the guarantee of deposits, savings and inter-bank loans
, the federal government has sent a clear message to investors emphasising the stability of the UAE's fin-ancial system, and alleviating any ill-founded concerns about the financial health of UAE banks.
New rules on the inter-bank market for krona go into effect, extending the maturity of inter-bank loans
to 9 and 12 months.
The scheme was designed so the deposits came from the assurance company and would be treated as customer deposits, which are considered a better measure of a bank's strength than inter-bank loans
share of overdue loans in the total loan portfolio of commercial banks (exclusive of inter-bank loans
and deposits) reaches 6.
Called as Negotiable Certificates of Deposit (NCDs), the securities, will enable banks to convert surplus deposits that they would otherwise deposit at the NBC for a tiny interest rate into securities that they can immediately sell or utilize as collateral for inter-bank loans
The plan is comprised of a maximum of EUR320bn euros for the country's inter-bank loans
, and EUR40 billion euros at most for capitalisation of French banks.
That will not banish inter-bank loans
," insisted McCreevy, "but we will ensure that now no institution will put all its eggs in one basket".
The Treasury has already committed pounds 250billion to guarantee inter-bank loans
following the Northern Rock crisis.