interview with ABDULAZIZ AL GHURAIR
How would you evaluate central bank policies in regards to personal loans and their potential impact on the wider economy, and what else can be done to protect the financial system from defaults?

ABDULAZIZ AL GHURAIR: The policies of the central bank have been fairly prudent, and are required to ensure the health of retail banking in the country.
I am a strong advocate of a free economy and adequate market discipline. Having said that, I also agree that regulators have to be vigilant and step in immediately if they feel the necessity or if the market players do not behave responsiblyaa.
The UAE Banks Federation (previously Emirates Banks Association), for instance, has set up technical committees to allow greater representation of banks.
Such bodies focus on market discipline and report back to the central bank periodically to highlight key issues that need addressing. We expect that this will work well in self-disciplining the banks on prudential issues.

What measures and incentives can Dubai adopt to accelerate its ambition of becoming a global centre for business and finance? ABDULAZIZ AL GHURAIR: Dubai aims to enhance its status as a global business and finance hub by continuing to diversify its economy and improve its infrastructure.

The Dubai International Finance Centre (DIFC) plays a crucial role in this ambition, hosting around 900 firms, including major banks and insurers, and offering incentives like 100% foreign ownership and a 0% tax rate.
To maintain its competitive edge, Dubai must align its infrastructure with international standards and promote best practices among various economic zones.
DIFC is pivotal in this growth strategy, contributing significantly to the UAE's reputation as a prime business location.

To what extent can the banking sector support the development plans of the UAE and the emirate?

AL GHURAIR: The overall health of the UAE banking sector has steadily recovered from the dangers following the 2008 global financial crisis.
Admittedly, there was a temporary stress in the system due to liquidity concerns and the sudden spike in credit losses. However, due to quick actions by the UAE government and the UAE central bank the situation stabilised quickly.
Today, the national banking sector is very healthy; there is ample liquidity in the system, capital adequacy is high, provision for loan losses are declining, and non-performing loans are sufficiently reserved.
With the banking sector expected to grow it is in a far stronger position to better support the UAE’s long-term development plans.

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