The UAE government said yesterday it had replaced its Central Bank governor, Sultan bin Nasser Al Suwaidi, who has held the post since 1991, with Mubarak Al Mansouri, the chief executive of the Emirates Investment Authority, the federal sovereign wealth fund that helps invest the country’s oil revenues.
Mr Al Suwaidi presided over the UAE’s integration into the global economy and more recently oversaw the rebuilding of the country’s banking sector in the aftermath of the financial crisis, when the government supported many lenders and helped out Dubai with US$10 billion in funding.
He will also be remembered for engineering safeguards to prevent boom-and-bust cycles such as implementing a cap last year on the amount mortgage seekers can borrow to buy property after home prices lost as much as 50 per cent of their value in 2009. The outgoing governor will also be leaving on a high note, as banks staged a comeback over the past year. Lenders reported record profits last year as the economy turned the corner amid record-low interest rates, a resurgence of consumer confidence and increased government spending on infrastructure.
Mr Al Suwaidi also laid the groundwork to ensure that UAE banks adhere to new global banking regulations, such as Basel III, that seek to limit the risks lenders can take.
Under his stewardship, the regulator bought Dubai’s US$10 billion bond in February 2009 as part of a $20bn package. Since then, the Central Bank has worked to push through reforms to reduce risks within the financial system at a pace that has sometimes sparked resistance from banks.
In 2011, the central bank brought in rules to curb personal lending and cap retail banking fees. More notably, it introduced limits on the amount local lenders can offer government-related firms, many of which took out excessive debt in the run-up to the financial crash.
“He’s been doing all the right things,” said Jaap Meijer, head of financial services research at Dubai-based Arqaam Capital. “Under Al Suwaidi, the bank worked at improving consumer protection laws, helped banks improve their provisions, improved lending standards and made sure that banks would be ready for the new Basel III industry regulations on liquidity and capital, among other things. I expect the new governor to keep doing more of the same.”
The central bank board will continue to be chaired by Khalifa Mohamed Al Kindi, with Khalid Juma Al Majid, Younis Haji Al Khoori, Khalid Ahmed Al Tayer, Khalid Mohammed Salem Al Balama and Hamad Mubarak Buamim, also staying on board, the official Emirates news agency WAM said, citing a federal decree from the country’s President, Sheikh Khalifa. The board of directors will serve a four-year term, it said.
mkassem@thenational.ae
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