MIDEAST DEBT-UAE banks' exposure to government highest since 1970s -BofA | Reuters

MIDEAST DEBT-UAE banks' exposure to government highest since 1970s -BofA | Reuters:

"* Dubai GREs relied heavily on local banks after crisis

* This offset partial pullout of foreign banks

* UAE banks' exposure has now jumped to 104 pct

* BofA doubts exposure limits to be applied in timely way

* But banking sector as a whole stronger than a few years ago

By Abhinav Ramnarayan

Sept 15 (IFR) - United Arab Emirates banks' exposure to government-related entities is at its highest level as a percentage of capital since the 1970s, and there is little chance of authorities enforcing strict exposure limits, analysts at Bank of America Merrill Lynch said.

The domestic banking sector has extended a whopping $42 billion in credit to the government and government-related enterprises (GREs) since the 2008 banking crisis.

As a result, exposure to the government and non-financial public enterprises as a percentage of bank capital is at 104 percent, the highest ratio since the late 1970s, the researchers said in a note."

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