Two of the UAE's biggest banks are quietly suggesting the federal Government should establish a fund to buy up debts they are no longer allowed to hold under controversial new lending rules.
In April, the Central Bank announced a limit on how much UAE banks could lend to governments and their commercial entities and gave the lenders six months to comply. The deadline to meet the new rules passed on Sunday.
Senior sources, who did not want to be identified, at the banks based in Dubai, are privately briefing in support of a fund to absorb their excess exposures to government entities at cost instead of at fire-sale prices to other banks and hedge funds.
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