The Central Bank of the UAE has published the 2017 Financial Stability Report.
The report provides information on the strengths and vulnerabilities of the UAE financial system and the regulatory and policy measures introduced by the Central Bank. The report also includes assessment of key macro financial and banking sector developments.
In its highlights, the report noted that the macroeconomic and financial market conditions remained stable in the UAE in 2017 and the global and domestic economic growth and outlook improved during the year. Also in financial markets, the money market spreads, dirham-dollar forward points and credit market spreads narrowed reflecting ample liquidity and confidence in the UAE financial system.
The UAE banking sector remained well capitalised, with solid liquidity buffers, stable funding, and improved profitability. The liquid assets of the banking sector increased and stable funding indicators improved although bank lending growth slowed down during year under review.
In the same year, a regulatory stress test conducted to assess the resilience of the UAE banks to adverse macro financial market conditions showed that the banking system has sufficient capacity to withstand fluctuations in the macroeconomic and financial market conditions.
The Central Bank is fully committed to timely adoption of international standards and four UAE banks were designated as domestic systemically important.