Dubai central bank bailout plan prudent say experts

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The United Arab Emirates' central bank said on Sunday it would provide additional financing for commercial banks and that it stood behind the Gulf Arab country's banking system and branches of foreign banks.

Here are a few analysts' comments on Dubai Central Bank support move:

Mohieddine Kronfol, Managing Director at Algebra Capital

"Regardless of what comes of the restructuring of Dubai World, the central bank has to be concerned first and foremost with the integrity of the banking system so it has to make sure the fallout from the restructuring does not impair the banking system, prevents any flight of capital and limits the amount of provisions banks operating in the UAE need to book if they have to. It's a preventive measure."

Shahid Hameed, Global Investment House, Head of Asset Management for Gulf Region

"Something like this is very much needed. We were expecting for the central bank to release a statement before markets open up tomorrow. This should be a positive."

Abdul Kadir Hussain, CEO, Mashreq Capital

"The central bank is making sure there are no systemic issues and is standing behind the banks, Dubai World was not mentioned, but it's a step in the right direction."

John Sfakianakis, Chief Economist at Banque Saudi Fransi-Credit Agricole Group

"It's important because the main concern is that there might be some panic behaviour by depositors in Dubai and by bankers who want to take deposits out of the banking system."

"This will support the liquidity and the overall soundness of the banking system in the UAE and especially in Dubai."

"You might have depositors who might panic and you might have a run on the Dubai-based banks."

"The central bank is sending a strong message to everyone that they are providing ample liquidity and the guarantee to banks in the UAE."

"The stock market in Dubai is very likely going to take a limit-down hit."

Ayman El Saheb, Director of Operations, Darahem Financial Brokerage

"It's good to know that they are still willing to help. Support of any kind is welcome at this point."