Bank bonds to be guaranteed

A law guaranteeing bonds issued by local banks was passed by the Federal National Council Tuesday in a move aimed at making fundraising easier for the nation’s lenders.

The law, which now awaits final approval from Sheikh Khalifa, the President of the UAE, is the third guarantee measure the Government has passed to ensure the stability of the country’s banking system during the financial crisis.

It follows earlier government initiatives aimed at backing local deposits and interbank loans. If signed into law, the bond guarantee would cover bonds issued before Oct 11, 2011, and would last for five years.