Notifications

Monday 18 July 2022


Saturday 31 December 2022

Expo 2020

Join the making of a new world at the greatest showcase of human brilliance and achievement

Monday 11 July 2022


Saturday 31 December 2022

UAE Next 50

The year of preparation for the next fifty requires community collaboration to advance our development drive and its sustainability, and fulfill our aspirations to a better future for our UAE.

Accessibility settings

Text size

A-

A+

Theme color

Color blind mode

Night reading mode

Rate this page

Rated by 9 People

Thanks for rating

Please provide a valid value for Name
Please provide a valid value for Email Address
Please provide a valid value for Phone number
Please provide a valid value for Subject
Please provide a valid value for Message

Back

Financial Stability

Preserving and protecting the UAE’s financial system

The Financial Stability Department (FSD) helps to maintain and promote financial stability in the UAE by conducting analyses to assess the potential risks and vulnerabilities facing the country’s financial system, and by supporting the Central Bank of the UAE’s financial stability decision-making.

This analysis is crucial to creating new policies and measures that help to mitigate identified risks and prevent disruption to the financial system. Alongside our contributions to policy, analysis and financial stability decisions, we produce and publish reports and papers to share essential insight with our stakeholders.  

Financial Stability Analysis and Decision

Financial Stability Analysis

Financial Stability Analysis covers regular assessments of the financial system’s resilience, risks and vulnerabilities, and thematic analysis of emerging risks and trends in the financial sector. Analysis of the international financial system provides prompt identification of spill-over risks to the UAE financial system. Recommendations and decisions to implement macro-prudential measures and other financial system policies are based on thorough consideration. Analysis of the international financial system provides prompt identification of spill-over risks to and from the UAE financial system.  Meanwhile, the CBUAE identifies emerging risks rapidly in special focus areas, thanks to the thematic assessments that it conducts regularly.

Financial Stability Decisions

Under the authority delegated by the Board of Directors of the CBUAE, the Financial Stability Policy Committee (FSPC) reviews the stability of the country’s financial system, domestic and international economic developments. The FSPC works to mitigate systemic risks by proposing financial stability policies and measures, as well as to ensure readiness to manage any financial crisis. Additionally, the FSPC reviews and approves key research, economic and financial publications.

Financial Stability Policies

As part of the CBUAE, the Financial Stability Department (FSD) employs financial sector policies that strengthen the resilience, improve the efficiency and address identified vulnerabilities in the financial system. 

 

These macro-prudential policies aim to prevent any disruption of financial services that could result in serious negative consequences for the economy, and therefore contribute to the stability of the financial system. 

 

The financial crisis management and preparedness policy increases the CBUAE’s readiness to respond to a financial crisis. This specific policy ensures that any serious system-wide problems in the financial industry are addressed promptly through co-ordinated cross-functional policy action.

Financial Stability Policies

Macro-prudential Policy Tools

Macro-prudential policy instruments refer to measures within the CBUAE’s powers that are aimed at reducing risks in the financial system and mitigating the effects of threats. The Financial Stability Department (FSD) completes macro-financial assessments to support the implementation of macro-prudential policies. Macro-financial analysis links financial market conditions and economic activity. These assessments are based upon a broad range of information and analytical methods, including macro-prudential stress tests.

The table on this page provides an overview on the dedicated macro-prudential instruments that can be deployed by the CBUAE to meet its macro-prudential policy objectives. If considered necessary, it can also use other prudential instruments, supervision and regulations, to achieve macro-prudential objectives.

The changing nature of structural and cyclical risk means that the CBUAE applies different methods to address different risks...
The tools that address structural risks in the financial system can remain at established levels for prolonged periods of time, with revisions only in cases when policy levels are found to be inadequate.
Tools addressing cyclical risks require more active involvement to adjust policy levels, according to the financial cycle development stage, to mitigate sources of risk to financial stability.
Commonly, the tools deployed are bank-based (such as capital and liquidity buffers) and borrower-based (such as loan-to-value ratios for home buyers).

Stress Testing

The purpose of stress testing is to identify and analyse vulnerabilities in the UAE’s financial system. The objective of this task is to provide a forward-looking capital and liquidity adequacy assessment of individual banks and the UAE’s banking system, to assess their capacity to withstand potential adverse systemic risks.

The Financial Stability Department (FSD) completes both top-down and bottom-up stress tests in the UAE.

Top-down stress tests are conducted in-house, using internal models and tools.  

Bottom-up stress tests are conducted by participating banks under consistent methodologies, scenarios and key assumptions developed by the FSD, in co-operation with the other stakeholders. The aggregate results of stress testing are published in the annual Financial Stability Report.

Financial Crisis Preparedness and Management

The CBUAE has adopted a comprehensive Financial Crisis Preparedness and Management framework.  

Its objective is to ensure that serious problems in the financial system, especially in banks, are addressed effectively and immediately. Prompt action minimises the potential risks of contagion, the drying-up of liquidity or possible fiscal burdens on the country.

The framework helps to maintain trust in the UAE’s financial system, and its proper functioning during stressful times. As crises often appear suddenly and present unique challenges, the framework’s flexibility allows for an effective, tailored response. 

The CBUAE responded to the COVID-19 pandemic’s uncertainties by activating its Financial Crisis Preparedness and Management framework, and introducing a comprehensive Targetted Economic Support Scheme. 

Financial Stability Report

Each year, we publish a Financial Stability Report to provide a comprehensive assessment of the UAE’s financial system. The report covers current macro-financial conditions, banking system assessment, non-bank financial institutions, payment systems and other relevant developments of interest to our stakeholders.

 

The report focusses on the assessment of risks, vulnerabilities and systemic issues in the financial system. It also contains analytical sub-chapters on systemic issues related to safeguarding financial stability.  

 

You can view and download the latest Financial Stability Report on this page.  
Financial Stability Report

Related Reports


Financial Stability Report

Financial Stability Report for the Year 2021

11 August 2022


Financial Stability Report

Financial Stability Report for the year 2020

31 December 2020


Financial Stability Report

Financial Stability Report for the year 2019

31 December 2019


Financial Stability Report

Financial Stability Report for the year 2018

31 December 2018


Financial Stability Report

Financial Stability Report for the year 2017

31 December 2017


Financial Stability Report

Financial Stability Report for the year 2016

31 December 2016


Financial Stability Report

Financial Stability Report for the year 2015

31 December 2015


Financial Stability Report

Financial Stability Report for the year 2014

31 December 2014


Financial Stability Report

Financial Stability Report for the year 2013

31 December 2013


Financial Stability Report

Financial Stability Report for the year 2012

31 December 2012

The CBUAE collaborates regularly with other international entities to achieve its goals

Core Financial Soundness Indicators


Core Financial Soundness Indicators (Core FSI)

Core Financial Soundness Indicators - Q3 - 2021

30 September 2021


Core Financial Soundness Indicators (Core FSI)

Core Financial Soundness Indicators - Q2 - 2021

30 June 2021


Core Financial Soundness Indicators (Core FSI)

Core Financial Soundness Indicators - Q1 - 2021

31 March 2021


Core Financial Soundness Indicators (Core FSI)

Core Financial Soundness Indicators - Q4 - 2020

31 December 2020


Core Financial Soundness Indicators (Core FSI)

Core Financial Soundness Indicators - Q3 - 2020

30 September 2020


Core Financial Soundness Indicators (Core FSI)

Core Financial Soundness Indicators - Q2 - 2020

30 June 2020


Core Financial Soundness Indicators (Core FSI)

Core Financial Soundness Indicators - Q1 - 2020

31 March 2020


Core Financial Soundness Indicators (Core FSI)

Core Financial Soundness Indicators - Q4 - 2019

31 December 2019


Core Financial Soundness Indicators (Core FSI)

Core Financial Soundness Indicators - Q3 - 2019

30 September 2019


Core Financial Soundness Indicators (Core FSI)

Core Financial Soundness Indicators - Q1 - 2019

31 March 2019


Core Financial Soundness Indicators (Core FSI)

Core Financial Soundness Indicators - Q4 - 2018

31 December 2018


Core Financial Soundness Indicators (Core FSI)

Core Financial Soundness Indicators - Q3 - 2018

30 September 2018


Core Financial Soundness Indicators (Core FSI)

Core Financial Soundness Indicators - Q2 - 2018

30 June 2018


Core Financial Soundness Indicators (Core FSI)

Core Financial Soundness Indicators - Q1 - 2018

31 March 2018

Rate this page

Rated by 9 People

Thanks for rating

Last updated on: Thursday 28 July 2022

Total visitors 2828

)
)