Loan guarantee official

The Federal National Council passed a bill Tuesday to regulate the Government’s guarantee of interbank loans.

The law, announced last October at the height of the financial crisis, was intended to free up lending between banks after credit froze in the wake of the collapse of Lehman Brothers. But bankers said the latest move was now a formality because lending had already resumed.

Under the law, the Ministry of Finance will be able to guarantee lending between banks operating in the UAE, including foreign banks with local branches.