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Wednesday, 2 September 2009

UAE delays bank reserve-increase target - cbank (Update)

The United Arab Emirates central bank has delayed bank targets for increasing capital reserves as a buffer for surprise losses and changed the proportion of Tier 1 capital which banks need to set aside.

The rule, which will initially require banks to maintain a Tier 1 capital adequacy ratio of 7 percent, was added as a measure of "prudence and caution", the central bank said, as it strives to restore confidence among lenders and spur lending.

A circular issued by the central bank on Sunday, obtained by Reuters, said banks should work toward increasing their overall reserves to 11 percent by September 30 and that the Tier 1 component should be at least 7 percent.

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