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UAE to require banks to hold 10% liquid assets

The UAE central bank is to require banks in the country to hold high-quality liquid assets equal to 10% of their liabilities from January 1 next year, as the apex lender prepares the sector to comply with Basel III global standards, Reuters has reported. Physical cash, reserve requirements, central bank instruments and UAE federal government bonds would qualify as such assets, said the central bank. The rule will extend until the end of 2014, after which it will be replaced by the Basel III Liquidity Coverage Ratio, which will require banks to hold enough liquid instruments to cover a month of severe cash outflows.