Proposals adopted to insulate UAE from global crises

Abu Dhabi, May 24, 2012 (WAM) - The UAE Higher Committee overseeing the crafting of laws to regulate the country’s financial sector on Wednesday adopted several recommendations aimed at insulating the country from any future global financial crises. A committee meeting chaired by Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai and UAE Minister of Finance, instructed a technical team to complete the task of reviewing the draft laws in preparation for submitting it to the cabinet for approval. The committee discussed a number of topics on its agenda and reviewed previous resolutions issued by the federal government to address the effects and reduce the impacts of global financial crises by forming a temporary ministerial committee headed by the Minister of State for Finance, the Minister of Economy and the Governor of the UAE Central Bank. The meeting was attended by Minister of State for Finance and the Committee’s Vice-Chairman Obaid Humaid Al Tayer, Minister of Economy, Chairman of the Securities and Commodities Authority and the Insurance Commission Sultan bin Saeed Al Mansouri, Chairman of the Board of Directors of the UAE Central Bank Khalil Mohammed Sharif Foulathi, Central Bank Governor Sultan bin Nasser Al Suwaidi, Undersecretary at the Ministry of Finance Younis Haji Khouri and Director of Revenue Development Department at the Ministry of Finance Faisal Ali Al Mansouri. “With the rapid developments in the financial sector and in the quest to avoid falling into any crises that might face the global financial sector, the thinking about creating an integrated financial system that contributes to the protection of the country’s rights as well as the protection of consumers had become a matter of urgency. Accordingly, the committee adopted several recommendations that were proposed for submitting to the cabinet which, in turn, will contribute to the development of the country’s financial sector through legislation with a view to becoming one of the best legal systems in the world,” a statement at the end of the meeting said. Among these recommendations were the adoption of a binary system called Twin Peaks, which is based on the establishment of a state control mechanism to avoid structural risks in the banking and financial system of the country. The committee also agreed to propose to the Cabinet to form a permanent higher committee for continuous supervision of the financial sector. Such a committee will function as a safety valve protecting the sector from any financial risk that may threaten the country’s banking and financial system, suggested the meeting. The committee, within its powers as enshrined in the new law, will have a major role in making key decisions to control the financial sector. The committee is proposed to work as a link between the Cabinet and the two prime regulators of the financial sector in respect to the development of all laws regulating financial services. The committee also stressed the Central Bank’s important role of issuing periodic reports on the state of the country’s economy and taking all precautionary measures to prevent any financial risk. – Emirates News Agency, WAM