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Banks use less than 15% of facility provided by government: Al Suweidi

Jan 21, 2009 - 11:13 -

WAM Abu Dhabi, 21st Jan. 2009 (WAM) -- Banks operating in the country used less than 15 per cent of the facility made available to them by the government in light of the world financial crisis, an indication of the increasing liquidity with these banks, UAE Central Bank Governor Sultan bin Nasser Al Suweidi disclosed today.

''The banks didn't resort to the facility offered by the bank and the government and this underscores sound position of liquidity and its adequate availability with these banks, Al Suweidi said following talks with a group of French financial officials.

He said the apex bank had directed banks not to compel their clients to liquidate their assets-backed securities because of the negative situation the local stock market is facing.

He termed the fall-out of the international financial crunch as just the tip of the iceberg.

''Consolidation between banks may provide one of the most effective solutions to face the shocks of the crisis,''he said.

Meanwhile, Al Suweidi held talks with the Governor of Central Bank of France, Christian Noyer, over efforts to contain the impact of the global financial crisis.

They also discussed strategies of international financial centres to seize potential investment opportunities.

The central bankers highlighted the importance of expanding dialogue between the two countries in areas as diverse as assets management, insurance, economic research and Islamic financing.

Al Suweidi said he was satisfied with the understandings reached by the two sides the sound principles to handle the aftermath of the crisis.

Following the talks, the French central bank chief delivered a lecture on the world financial crisis and policies crafted by both public and private sectors to handle it.

Analysing the strategies required to overcome the crisis, he pointed out that European governments, under the leadership of France, have set up a sound and consistent action plan, the axis of which are the following ; *Authorities are extending guarantees to banks' refinancing so that they can, in turn finance the economy.

*Implementation of significant reforms of accounting rules.

*Governments have confirmed their willingness, when warranted, to step in and support banks' capital.

The Governor of the French Central Bank also said the concrete measures taken by the French financial market to face the international crisis, which aim at strengthening the competitive position of the market in Europe and throughout the world.

He called on UAE issuers, investors, banks and financial institutions to benefit from the investment opportunities available in the French financial market.

WAM/TF