The UAE has a reliable banking system that is capable of withstanding severe shock

Strong regulation: The Central Bank of the UAE (CBU) is the country’s financial regulator and is responsible for overseeing the banking sector. The CBU has strict regulations in place to protect depositors and ensure the stability of the financial system.

High capital adequacy ratios: UAE banks are required to maintain high capital adequacy ratios, which means that they have enough capital to absorb losses and continue operating even in difficult economic conditions.

Diversified loan portfolios: UAE banks have diversified loan portfolios, which helps to reduce their risk exposure.

Government support: The UAE government has a strong track record of supporting the banking sector in times of need.

In addition to these factors, the UAE banking system is also benefiting from the country’s strong economic performance. The UAE has a diversified economy with a focus on sectors such as oil and gas, tourism, and financial services. This economic strength has helped the banking sector to weather recent challenges, such as the COVID-19 pandemic.

Here are some specific examples of the UAE’s commitment to a reliable banking system:

• The CBU has implemented a number of initiatives to strengthen the banking sector, including Basel II and Basel III capital adequacy requirements, and stress testing.
• The CBU has also established a deposit insurance scheme to protect depositors in the event of a bank failure.
• The UAE government has a number of policies in place to support the banking sector, such as the provision of liquidity and guarantees.

As a result of these factors, the UAE banking system is considered to be one of the most reliable in the world. The IMF has praised the UAE’s financial system for its resilience and its ability to withstand shocks.