The UAE’s banking sector has recently been crowned the largest market in the GCC by total assets, valued at $336 billion. The IMF believes the “financial system remains sound,” even though external borrowing by financial institutions and big corporations has tripled from 2004 through the end of 2006, reaching $80 billion. The IMF holds back from sounding any alarms, as the UAE’s large net creditor position suggests there is no reason to worry. The bursting economy of the UAE is mainly due to population influx, considerable infrastructure projects, and increased oil prices. Mihir Marfatia, author of a Global Investment House (GIH) report published in March 2008 believes, “High oil price revenues are a major benefactor to [the banking sector which is] benefiting from a booming economy.” The increased demand for sharia-compliant banking services is also positively influencing the banking sector. The US subprime mortgage calamity is a hot topic throughout
