Before the global financial crisis hit home, the main priority for banks in the UAE was how to decrease inflation rates. Another top concern in 2008 was dealing with the flood of liquidity streaming into the market, as well as currency speculation. But then, at the end of the second quarter, liquidity started to dry up, and immediately after the financial crisis climaxed in September banks became reluctant to give out loans as liquidity was so scarce. By the end of 2008, banks across the United Arab Emirates will have borrowed a minimum of AED70 billion ($19 billion) from the government. As of the beginning of November, banks had already received 80% of this liquidity package. Such a move aims to — most importantly — provide liquidity to the sector, in addition to easing tight lending requirements amid the continuing global financial crisis. Raj Madha, director of equity research at
