UAE Banks risk credibility loss on Dubai exposures

[Joanne98]

Source: Reuters


DUBAI (Reuters) - The credibility of the United Arab Emirates finance sector will suffer unless the authorities and lenders move quickly to assuage fears that Dubai's debt trouble are spiraling out of control, analysts and bankers say.

Dubai, one of the seven emirates that make up the UAE, said on Wednesday it planned to restructure one of its holding companies, a shock announcement that triggered global concerns about the emirate's ability to meet its debt obligations.

International banks' exposure related to Dubai World amounts to $12 billion in syndicated and bilateral loans, banking sources told Thomson Reuters.

"I would say it is a huge shock for the UAE banking sector, and until we have some clarity the current situation will continue to cause damage," said Raj Madha, banking analyst at EFG Hermes.

Regional banks such as Emirates NBD and Mashreq Bank, which play a pivotal role in funding the UAE economy, have not made public statements yet on their exposure.


Read more: http://www.reuters.com/article/newsOne/idUSTRE5AR0MZ20091128

[kirby]

1. Corporate Blackmail Part 2.

If only the government doesn't stand behind our self-created free-market bubble, things will be bad...

[CRH]

2. UAE already has a credibility problem that exceeds finance, ...

and it might be best if this cascades into an uncontrollable banking, political, and public relations nightmare, for the world to see and conscious memories retain as a bell weather of moral decadence.

It is sad when the elite of the societies from every continent jet to Dubai to experience material excess to the maximum, but it is a travesty when it becomes commonly known the prices some people must pay to support the elite's party. When it is determined slavery, economic depravity, environmental destruction, and social separation is an acceptable cost of wealthy decadence, perhaps the economic failure is too polite a restraint, when morals do not provide a compass.

Dubai is but one Emirate of the UAE, but is it any different than a state in the US or a province in Canada? If this crisis creates an huge credibility and public relations problem for the entire UAE, nothing but better can replace the present reality.

Dubai has been painted in the business and mainstream press as an environmental, technological, and financial wonder built in a desolate desert. Now it is found the financial wonders are debtor castles in the sand, the surrounding environment a disaster, and the social structure that of barbarian dictators of past. Any sympathies of the treatment of Arab cultures by the west certainly must be tempered by the social wreck, that is Dubai. When in power, their actions appear not that different.

-- Dubai's dirty little secrets -- http://www.independent.co.uk/opinion/commentators/johann-hari/the-dark-side-of-dubai-1664368.html