The UAE's economic recovery is expected to strengthen further in 2022 and the country's banking system has the capacity to support the financial system and its growth, according to the Central Bank of the UAE. The Emirates' banking sector also demonstrated resilience amid the Covid-19 pandemic, helped by the CBUAE’s Targeted Economic Support Scheme (Tess), the banking regulator said in a statement on Thursday following a meeting with chief executives of national and foreign banks based in the UAE. The chief executives also welcomed the central bank's ongoing support of the local financial system through the Tess scheme. “This month, the UAE celebrated the Golden Jubilee of the Union. Looking ahead, expectations on the role of the banking sector will increase further,” said Khaled Balama, governor of the CBUAE. “The banks will be expected to contribute significantly to our nation’s far-reaching and ambitious agenda, and to become leaders not only in the region, but also in the global financial industry.” The UAE economy is <a href="https://www.thenationalnews.com/business/economy/2021/09/22/uae-economy-to-grow-21-in-2021-on-continued-recovery-from-pandemic-driven-slowdown/">forecast to grow 2.1 per cent</a> this year, driven by pandemic-mitigation measures such as a rapid Covid-19 vaccination programme and widespread testing, according to the central bank's <a href="https://www.centralbank.ae/sites/default/files/2021-09/QER%202021%20Q2%20-%20Economic%20Review%20-%20September%2022nd.pdf">second-quarter review</a>. The economy is expected to grow 4.2 per cent in 2022, higher than the previous forecast of 3.8 per cent. The Central Bank of the UAE also provided stimulus measures worth Dh100 billion ($27.2bn), which comprised a direct Dh50bn injection of funds through zero-cost collateralised loans. The Tess scheme has also helped the banks in managing liquidity during the crisis. Although the central bank said in September it will start a “gradual and well-calibrated withdrawal” of Tess, parts of which were extended to July 2022, about “95 per cent of banks have surrendered the scheme because they no longer need it”, Abdulaziz Al Ghurair, chairman of the UAE Banks Federation, <a href="https://www.thenationalnews.com/business/banking/2021/10/24/uae-banking-assets-to-grow-by-up-to-10-next-year-amid-expo-boost-and-economic-recovery/">said in October.</a> The UAE’s banking assets are expected to grow by between 8 per cent and 10 per cent in 2022 as the UAE economy continues to recover from the pandemic-driven slowdown and reap the benefits of hosting Expo 2020 Dubai, Mr Al Ghurair also said at the time. During the meeting, the CBUAE and banking chief executives also reviewed a range of supervisory and consumer protection measures, including new standards to improve oversight of bank's real estate financing exposures and changes to the CBUAE’s risk-based supervisory dashboard. “UAE banks will also be required to work actively towards full compliance with Consumer Protection Regulations and Standards. These steps to enhance consumer trust in the banking sector would impact the UAE banking industry and the national economy positively,” the CBUAE said. The UAE’s banking assets are expected to grow by between 8 per cent and 10 per cent in 2022 as the UAE economy continues to recover from the pandemic-driven slowdown and reap the benefits of hosting Expo 2020 Dubai, Abdulaziz Al Ghurair, chairman of UAE Banks Federation said in October.