Despite assurances, let us have a plan B



In normal circumstances, you would have to admire the sangfroid of the Central Bank of the UAE.

While the world financial crisis grows, while the euro zone teeters on the brink of meltdown, and while new fears surface about the strength of the US economy, the Central Bank's board holds its collective nerve.

The directors' reassurances that all is well with the UAE financial system will go some way towards calming regional fears of another bout of "western disease" spreading to the Middle East.

Central bankers are not supposed to lose their heads, even when all around them are losing theirs.

But these are not normal times. Global financial markets are experiencing a terrible sense of deja vu as credit dries up and liquidity freezes. The grim possibility is that we are back in August 2008, just ahead of the biggest financial crash in eight decades.

If this is the case, Central Bank directors would be well advised to recognise that eventuality early on and take steps to protect the country's financial system.

In 2008, we heard similar assurances, backed up by claims the UAE was "insulated" from the world's troubles. Precious weeks were lost in what turned out to be a false comfort zone, before the Central Bank acted to guarantee deposits and inject extra liquidity into the system. Three years on, the UAE economy is still living with the fallout from that delay.

The Central Bank argues convincingly that the measures put in place since 2008 have greatly strengthened the UAE's financial system. But it would be good to know there is a plan B, just in case.

Men's football draw

Group A: UAE, Spain, South Africa, Jamaica

Group B: Bangladesh, Serbia, Korea

Group C: Bharat, Denmark, Kenya, USA

Group D: Oman, Austria, Rwanda