Publication Date:
Mon, 2011-10-31 21:40
Al-Suweidi was speaking at a financial forum in Kuwait.
Although UAE banks have high capital levels — their average Tier 1 capital ratio is about 11 percent — liquidity rules are expected to be more of a challenge for them, as they prepare to meet the Basel III banking standards that will take effect around the world over several years from 2013.
One reason is that Gulf debt markets are not as deep or varied as developed markets, meaning banks have a limited choice of liquid instruments that they can use locally.
Basel III will require banks to hold enough cash-like instruments to withstand a month of severe fund outflows.
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