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UAE cbank to start Basel III implementation

ABU DHABI, December 9, 2015

The United Arab Emirates central bank is to start engaging with banks in the country for full compliance with the Basel III set of global banking regulations, the governor of the Gulf state's regulator said on Wednesday.

While Mubarak Rashid al-Mansouri didn't specify when this engagement would begin, he told a financial forum in Abu Dhabi that the aim was for full implementation by the end of 2018.

The Basel III rules, which are aimed at making the global banking system more resilient following the financial crisis, include forcing banks to hold more and different types of capital to insulate themselves during downturns.

Introducing them has been a slow process, though, as constituents initially argued over the scope of the regulation and deadlines for implementation were then pushed back.

In the Gulf region, regulatory moves around Basel III have also been patchy. Saudi Arabia was deemed compliant with the rules by the Bank of International Settlements in September, while Kuwait has said it will implement them by December 2016.

Mansouri's announcement is the first time the UAE has confirmed when it would comply with the rules, although it did set out rules for liquidity management which were linked to Basel III in May.

The governor told the forum the central bank has also held extensive consultations with the banking sector about Basel III.

Gulf banks are traditionally better capitalised than their Western peers due to the conservative nature of regulators.

The average Tier 1, or core, capital in the UAE banking system was 16.5 per cent at the end of September, according to central bank data. – Reuters




Tags: UAE | Central Bank | Basel III |

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