Banks have a plan to manage debt | GulfNews.com:
"It is essential for the health of the economy that banks extend credit to businesses and governments that can be used for investment and to expand their services.
However, too much exposure to a single company or government entity can potentially be risky for banks. It is a golden rule of business and investment that holdings be diversified and risk is spread as widely and as cost-effectively as possible. One of the causes of the persistent European financial crisis was the large exposure of financial institutions to the debts of governments which were unable to service their loans when they experienced economic problems. These concerns are behind efforts by the UAE Central Bank to restrict lending by commercial banks to state-linked entities and to increase the liquid assets financial institutions must hold to cope with any sudden withdrawal of funds or volatility in the financial system."
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